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Software & Systems

Bloomberg to Pull Plug on KYC Business Favored by Corporates

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April 04, 2019

Data company decides to close Entity Exchange and Entity Intelligence.

Bloomberg plans to shut down Entity Exchange, a know-your-customer (KYC) solution supported by Citibank and adopted by multinational corporations including Coca-Cola. A Bloomberg spokesperson told iTreasurer that “the company’s intention is to exit its KYC business.”

Bloomberg will be closing Entity Intelligence as well. The company didn’t provide a reason for closing the businesses or say when the process will be completed. Sources say it will be done over the next three months. 

Sources familiar with the decision cited insufficient interest in Entity Exchange, a KYC solution launched in May 2016 that corporates hoped would ease the pain of complying with repeated requests by banks for information. 

Coca-Cola’s director of international treasury, Jim Aschmeyer, told iTreasurer last fall that he had guarded optimism about solving KYC problems, thanks to a demo the Entity Exchange team did for him and some other corporates in Atlanta in late 2017. “As the demo proceeded, I kept thinking to myself that this could be the spark for change we’ve been looking for,” he said in September. 

To make his KYC vision become reality, Mr. Aschmeyer spent six months looking for what he calls “partners in crime.” The result was a team consisting of Citi, Bloomberg, Coke and four other large Citi customers—Merck, UPS, Cargill and Procter & Gamble. 

When reached on Friday, Mr. Aschmeyer said that although he was shocked by Bloomberg's decision, he understands that innovation takes time and that he remains committed to finding a solution to KYC pain. He added that he's already been talking to "key banking partners" about finding a "Plan B."

In February, SWIFT, the international payments network, said that beginning in Q4 2019, all 2,000 SWIFT-connected corporates will be able to join the KYC Registry and use it “to upload, maintain and share their KYC information with their banks.” 

The number of competing KYC solutions offered to banks and corporates make the business a crowded space, one likely reason for Bloomberg’s decision, according to sources. Competitors include IBM, IHS Markit and Thomson Reuters. Many of these solutions, along with Entity Exchange, have been discussed at NeuGroup meetings, including those of the Global Cash and Banking Group and the Asia Treasury Peer Group.

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