Re-imagining Client

Onboarding Bill Cline

KPMG National Practice Leader

© 2014 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved

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Creating Asset Based Solutions: COB

■ Client onboarding (COB) is the process by which a market participant determines whether to do business with a counterparty and the associated risk of doing so

■ COB is inclusive of regulatory mandates such as KYC and FATCA

■ The cost of getting it wrong can lead to fines > $1 billion plus substantial adverse reputational impact

■ Legacy state is a largely manual, error prone, time consuming, expensive, incomplete, and ineffective process

■ We saw it as an innovation opportunity to use “big data” to create a unique and differentiated KPMG value proposition grounded in transformational operational efficiency and improvement

© 2014 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved

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What Is Big Data?

© 2014 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved

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Creating Asset Based Solutions: COB

BIG DATA: Techniques and

technologies that enable enterprises to effectively and economically analyze ALL of

their data

© 2014 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved

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COB Legacy State At Our Clients

■ At a Tier 1 bank, up to 40 million documents support COB and associated regulatory compliance at a cost of $80m/yr or more

■ About 65% of the data is “unstructured”, i.e. tax forms, articles of incorporation, emails, passports, etc

■ Client or outsourced operations with business process and workflow tools try to address the challenge today, and new market entrants are following the same approach

■ Emerging “data utilities” may create cleaner repositories of new client and entity data, but that will not absolve a market participant from looking across the enterprise for other data, bilateral communications, and contrary evidence

■ Innovative solutions providing quantum leaps in the front office have not translated to middle and back offices still relying primarily on workflow tools and lower cost labor.

■ Can human operations – onshore, captive, BPO – and streamlined workflow processes and tools alone really meet the COB & regulatory challenge?

© 2014 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved

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COB Managed Services

■ A seamless blending of a patent pending “big data” asset based solution with expert, highly automated business process operations

■ Designed as a managed service to optimize economies of scale ■ Delivers at least 20% cost reduction for equivalent scope of service plus

unique differentiated value in the form of: – Faster

– More complete

– More accurate

– More sustainable excellence

– More defensible excellence with internal and external regulators

© 2014 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved

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COB Platform Functionality

■ Ingests petabytes of structured and unstructured data across the enterprise into an advanced “NoSql” database

■ Intelligently extracts reference data in context from unstructured data via “content enrichment” and scores confidence level

■ Enables powerful searches and queries of the aggregated data repository

■ Validates and executes data against metadata based policy models (currently KYC, FATCA), automating business processes to produce successes, failures, and exceptions

■ Monitors public and subscription data sources for negative news events, legal entity changes, i.e. events impacting risk or compliance

© 2014 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved

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COB Platform Functionality (con’t)

■ Maintains electronic audit trail of every policy executed and every data source checked

■ User friendly graphical user interface and dashboard reporting ■ Designed as a managed service to capture recurring revenue ■ Platform use in remediation and classification “engagement enablement”

can help alleviate resource shortages, increase margins, enhance client value, foster competitive differentiation, and up-sell ongoing managed services

■ A unique, patent pending IT asset holistically complementing business process excellence and KPMG domain expertise to improve every aspect of our client’s COB legacy state

© 2014 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved

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COB Platform Architecture

© 2014 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved

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Next On The KPMG Transformation Agenda

■ More regulations and policies – EMIR, Dodd-Frank, jurisdictional nuances

■ Converged repository of enterprise (market) reference data, client and legal entity data, risk data

■ Challenges in financial services and other industries will benefit from:

– Aggregation of huge quantities of structured and intelligently extracted unstructured data

– Powerful, aggregated search and query capabilities

– Execution of that data against metadata models to produce results, exceptions, analyses and insights

– Audit trail of all process results and data sources

– Dashboards and reporting for transparent SLAs

– Seamless blending of “big data”, people, processes, and workflow to drive operational efficiency and operational improvement grounded in principles of better, cheaper, faster

Thank you for taking the re-imagine journey with KPMG and MarkLogic

Questions?