Regulatory

Onboarding:
The Fenergo Way

A Fenergo Paper

At a time of unprecedented regulatory unrest, financial

institutions are struggling to determine how they will
comply with all the new regulations making their way
into the world of financial services. New regulations,
such as FATCA, Dodd-Frank, EMIR and MiFID, as well
as enhancements to existing AML and CDD regulations,
are placing even more demands on already stretched
compliance, data management and onboarding teams.

In this paper, Fenergo outlines its unique approach

to achieving an efficient and effective regulatory
onboarding programme by adopting a horizontal
approach to compliance management and a
lifecycle approach to regulatory onboarding.
Regulatory Onboarding The Fenergo Way

Contents
Page

1 Introduction 2

2 Regulatory Onboarding -The Fenergo Way 4

3 How It Works 7

4 Let the Onboarding Commence 16

5 Benefits of Fenergos Approach 17

6 Conclusion 19

7 About Fenergo 20

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Introduction

By Marc Murphy, CEO, Fenergo

Over the last few months alone, weve witnessed:

l the finalization of FATCA, Dodd-Frank, EMIR and MiFID II rules;

l the proposal for an enhancement of existing money laundering rules in the form of the 4th EU
Money Laundering Directive; and

l the completion of Customer Due Diligence (CDD) rules by FinCEN in the US, and the Financial
Conduct Authoritys (FCAs) commencement of a thematic review of the UKs laws on AML systems
and controls (expected later this year).

On top of this, over the last year or so, weve seen high profile, punitive fines being levied against
industry household financial institutions for past failures and non-compliance with existing regulations
as a way to bring more accountability into the global financial services sector.

All of these regulations will have a sizeable impact on the data, documentation, classifications, checks
and screenings that need to be completed for all new and existing clients, making the process of client
onboarding far more challenging. With so many regulations being proposed and enacted, some financial
institutions are resorting to implementing separate compliance programs, policies and processes in an
effort to be in with half a chance of meeting regulatory deadlines on time.

However, the fundamental problem with this approach is that it, inevitably, leads to spiralling compliance costs
for the funding of separate budgets, teams, technology and data
requirements. Furthermore, it piles additional pressure on central resources
Its not about prioritization anymore; like IT and data management, with each compliance stream making their
its about managing compliance own regulation-specific demands on them. This results in duplication of
implementations simultaneously. effort and requests, adding further cost to the overall cost of compliance.
Moreover, it also guarantees the continued existence of functional, system
and data silos, preventing financial institutions from re-using data and documentation held in various
repositories throughout the institution.

With regulatory deadlines coming hard and fast at financial institutions, some with converging implementation
dates, compliance teams need to think holistically about various regulations at the same time. Its not about
prioritization anymore; its about managing compliance implementations simultaneously. This is not an easy task
given the typically siloed walls that exist between functional divisions right across the institution, resulting in
disjointed systems and pools of unconnected client and counterparty data lying across the organization.

In this paper, we outline the Fenergo approach to enterprise regulatory onboarding. Fenergos approach differs
a little from the norm. We advocate taking a horizontal, lifecycle approach to regulatory onboarding. In very
simple terms, this involves marrying together the client and counterparty data management, compliance and
client onboarding activities from across the institution and managing these in a cohesive, integrated manner
on one platform solution.

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It means tearing down the siloed walls that exist between functional divisions and untapping the value already
held within the institution by enabling the re-usability of documentation and data held in various repositories
across the bank.

It comprises data cleansing, remediation and mapping of new data elements that support new regulatory
classification structures. This will help to create higher quality data that, when entered into the Fenergo
Compliance Engine, will ultimately determine the regulatory route a client / counterparty needs to travel in
an effort to gain compliance with all relevant regulatory obligations.

Finally, its about onboarding the client as efficiently and compliantly as possible to At the end of the day, taking
generate revenues immediately and, through the delivery of a high service level,
regulatory compliance in a
encourage clients to onboard new, higher value products over time. Taking a
lifecycle approach to regulatory onboarding involves the automation of continual piecemeal fashion, on a
data and documentation updates, which can trigger new compliance events regulation-by-regulation basis,
(for sufficiently material changes) and the re-usability of data and documentation
for faster onboarding for future cross-sell and upsell opportunities. is not a strategy for success.

At the end of the day, taking regulatory compliance in a piecemeal fashion, on a regulation-by-regulation basis
is not a strategy for success. Instead, it will only succeed in cementing siloed walls between functions, creating
deeper pools of disparate data and documentation collected from repeated requests from clients, which could
seriously hamper the onboarding experience.

In the pages following, well describe in detail how our solutions and approach to regulatory onboarding is
helping leading financial institutions across the world manage all their data, compliance and onboarding
requirements on a single platform, reducing the cost of compliance and increasing the overall return on
technology investment.

If you have any questions on Fenergos Regulatory Onboarding paper or would like to see a demonstration of
the solution in action, please email us at info@fenergo.com. Alternatively, visit our website at www.fenergo.com for
more information about all of our solutions.

Marc Murphy, Fenergo CEO

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2 Regulatory Onboarding - The Fenergo Way

Before we delve into how regulatory onboarding works in practice, let us briefly set the scene by taking you
through the Fenergo platform solution stack.

Fenergo takes a unique approach to regulatory onboarding and data management. Built upon three core
product pillars (Client & Counterparty Data Management, Enterprise Compliance Management and Client
Onboarding Lifecycle Management), Fenergos Enterprise Platform is designed to help financial institutions
manage client and counterparty data, comply with new and emerging regulations and onboard clients and
products quickly and efficiently all on one platform solution.

Underpinning this platform is a configurable set of extendible technologies that support the three core product
pillars. These extendible technologies include: data, business rules engine, business process management
(BPM), document management and case management.

PEP &
Party Sanctions Data
Master Ref

Avox Omgeo
BvD APls

Bloomberg

Business Document Case

Data Rules Engine BPM Management Management

Fenergos Enterprise Regulatory Onboarding & Data Management Platform is comprised of:

Fenergo Central Client & Counterparty Data Management:

Every regulatory onboarding process starts with data whether that involves new data take-on or re-using
existing data. Fenergos Client & Counterparty Data Management solution allows core legal entity data to be
stored and managed centrally. The Fenergo solution can act as a party master or slave, ultimately ensuring
that data is stewarded in the manner required. Every legal entity has a role and is connected to different entities
and hierarchical structures, leading to the creation of a master copy of customer data.

With Fenergos Client & Counterparty Data Management, data can be created, taken-on, stored, cleansed,
remediated and managed in a way that provides a single repository across the institution. This solution includes
the following components:

l Core Reference Data Associations Master & Slave

l Key Compliance Data Cleansing

Accounts
& Matching
l Account Hierarchy
Standard Key Contacts
l Client Hierarchy Reference Data & Authority

l Document Management Corporate Remediation

Hierarchy & UBO
l Relationship and CRM
Settlement Maintenance
Instrument
l Product Catalog.

Client & Counterparty

Data Management

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Dodd-Frank EMIR

Fenergo Enterprise Compliance Management:

KYC AML 3rd AML
The Fenergo Enterprise Compliance engine adopts a horizontal approach FATCA Directive /
Patriot
to compliance management, enabling banks to perform all the necessary Fenergo
Act

Risk
compliance and regulatory checks across a range of acts, regulations TAX
Compliance Based
Checks
and directives - such as AML, KYC, CDD, MiFID, FATCA, Dodd-Frank MIFID
Business
Conduct

Ex
Client Standards
and EMIR - based on the data and documentation captured.

te
nd
Classifications

ab
e l
Its dynamic rules engine determines the legal entitys regulatory journey

Fr
FSCS / FINRA

am
TDSI

ew
based on five key pieces of information (legal entity type, country, role,

or
k
booking entity and products being traded) and assigns a policy to the legal entity, which dictates the specific
regulations with which the legal entity needs to comply, the KYC questions that need to be answered and the
documentation that needs to be supplied etc. More on this in the next chapter.

Its rules-driven, risk-based approach to compliance management allows financial institutions to:

l Build a holistic and complete client profile for the accurate measurement of risk

l Satisfy all KYC/AML requirements

l Classify and comply with FATCA, Dodd-Frank, MiFID, EMIR, Patriot Act, OFAC and FinCEN etc.

Fenergo Client Onboarding Lifecycle Management:

The Fenergo Client Onboarding Lifecycle Management is a sophisticated workflow management solution that
spans functional areas within banks and every touchpoint within the client lifecycle to enable quick and
efficient onboarding of clients, getting them trade-ready as soon as possible.

The Fenergo workflow engine acts as the key orchestrator of events and decisions in the client lifecycle
workflow, in scenarios where work is executed in the Fenergo platform or in some other tool.

It provides an end-to-end workflow management tool that manages all sub-processes and workflows that need
to be executed to bring a client from initial take-on through to all the various stages of approvals and requests
for information that they need to go through to be onboarded. In this way, the client will commence its master
journey or its lifecycle from its initial interactions with Sales (or Relationship Manager), through to Compliance
and Credit approvals, through to the Operations, Technology and Legal teams before arriving back with the
Onboarding team for finalization.

Fenergos lifecycle approach to client onboarding means that our solution goes beyond initial onboarding
and takes a lifetime view of the client, enabling the financial institution to perform data refreshes, ongoing
due diligence and use the centralized data to support upsell and cross-sell opportunities.

AML/Compliance Sales Credit

Tax Legal
Risk

Cap Intro Integration

Fenergo
Client Onboarding
Lifecycle Management

Operations

Account Mgt. FX
Market Access ETD
Fl

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Sitting on top of all three core product pillars, there are three different ways in which the financial institution
can use and interact with the system. These include:

l Fenergo User Interface (UI) which allows the bank to operate the end-to-end Fenergo platform
out-of-the-box and provides a truly single view of all legal entity data and related artefacts in one
place, making the due diligence process much easier

l Client UI which allows the financial institution to extend the Fenergo solution with components of their
own user interface

l Blackbox where the financial institution can use aspects of Fenergos Enterprise Compliance and
Data Engine to perform tasks they want in a blackbox way.

Financial institutions also have the added choice of implementing the entire end-to-end Fenergo platform in one
go or can choose to implement any of the three core products as point solutions to solve a particular need (for
data management, compliance or onboarding).

Fenergo
Enterprise Platform

Client & Counterparty Enterprise Compliance Client Onboarding

Data Management Management Lifecycle Management

Counterparty Data AML Client

Client Data KYC Front Office
Master & Slave Dodd-Frank Credit
Instrument Type EMIR Compliance and COB
Standard Reference Data CDD / ODD Legal
Corporate Hierarchy FATCA Tech & Operations
Legal Entity Identifier (LEI) MiFID
Data Cleansing Tax
Data Remediation Self-Service Portal
Data Matching Regulatory Reporting
Data Maintenance

Business Rules Document Case

Data Engine BPM Management
Management

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3 How it works:
So what exactly is involved in onboarding a new client in compliance with KYC (Know Your Customer) and AML
(Anti-Money Laundering) obligations, in addition to all other regulations that pertain to that legal entity? Let us
take you through a step-by-step process that a financial institution will go through to onboard a new client from
data take-on or integration, through to compliance with relevant regulations and, finally, to the onboarding
workflow process itself.

The end-to-end Fenergo Enterprise Platform takes a five-stage process approach to onboarding new clients.
This includes:

1 Capturing, cleansing and remediating the legal entity data

2 Determining the client regulatory journey

3 Taking a risk-based approach to compliance

4 Performing AML / CTF checks, establishing legal entity hierarchies and identifying the UBO

5 Conducting regulation-specific classifications.

1. Capture, Cleanse and Remediate Legal Entity Data

When a legal entity is ready to be onboarded, the clients data will be passed from the CRM system of choice to
the Fenergo Client & Counterparty Data Management solution, where it is validated and checked for duplicate
records. From this, the onboarding team will seek to build a profile of the entity and its various associations and
relationships. This will involve new data take-on or integration of existing data lying in various repositories across
the institution. By harvesting this key data from disparate systems and using it to populate a central client and
counterparty repository, financial institutions can achieve a single, logical view of the client / counterparty.

There may exist across the institution many different identifiers linking to the same entity. The logical first step for
the institution will be to identify if duplicate records exist on the legal entity. With Fenergos Client & Counterparty
Data Management solution for duplicate handling, checks can be performed against:

1) The internal master file

2) External providers (e.g. Avox)
3) The Fenergo master.

Fenergos Client & Counterparty Data Management solution comes with sophisticated out-of-the-box adapters
that enable institutions to adopt a plug-and-play strategy of connecting with other key systems, both within and
external to the institution, such as:

l Operational and transactional systems (such as Calypso, Broadridge, Wall St.)

l Document management systems (such as FileNet, SharePoint, Documentum)
l Data providers (such as WorldCheck, Avox, Bloomberg, Thomson Reuters)
l Email servers

l Office products (including Outlook, Excel, Word)

l A number of different data formats (from flat file CSV to SOAP-based XML formats).

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In this way, the solution enables the tracking, merging and grouping together of various client identifiers, which,
when compiled, create a more holistic, accurate and complete picture of the client. This will help to enhance
overall risk management and improve client experience and profitability.

By applying pattern matching algorithms to data sets and lookups on unique At the end of this process, the
identifiers, Fenergos solution can bring all instances of data relating to the
bank should have an accurate,
legal entity into its Master Data Management area. If duplicated records are
found, the process of cleansing and remediating this data will take effect. consistent and transparent view
The Fenergo solution will connect all of these records and then conduct active of clients and counterparties
and passive duplication checks to manage instances of duplicated records. In
addition, it will automatically handle the remediation process to resolve through the creation of a logical,
common conflicts. single, consolidated source of
The Fenergo solution also helps financial institutions to improve data quality legal entity data, which can be
through its advanced data mapping and standardization capabilities by
securely accessed across the
transforming existing data records to new data structures. It takes a cautious
approach to data standardization and its potential impact on data semantics institution.
(meaning), the repercussions of which are more pronounced in the
compliance and regulatory space. To further improve the quality of the data, Fenergos solution automatically
accesses market data for the augmentation process.

At the end of this process, the bank should have an accurate, consistent and transparent view of all clients and
counterparties through the creation of a logical, single, consolidated source of legal entity data, which can be
securely accessed across the institution. By tracking and linking all client identifiers that may exist within the
bank, a central view of the client can be created, a golden copy of which can be shared with other functions
throughout the institution. The ability to connect data through intelligent linkages to create more complete and
accurate client and counterparty profiles will help institutions to make smarter decisions from both a regulatory
and business development perspective.

Throughout this process, the financial institution can choose the role that the Fenergo system will play. For
example, the Fenergo solution can either become the master reference data management solution or can act as
a slave by enforcing the policies and rules that need to be applied for the bank on their particular data systems.
In this way, depending on the banks current IT infrastructure, the Fenergo solution can either become the data
governor or the data steward, shepherding data through the system.

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An illustration of Fenergos Master Data Management Approach

External Systems Fenergo Data Remediation Fenergo Master Data

Data
Transformation

Knowledge Base
Source

Client Master

Duplication
Check

Matching Algorithm Suite

Below

Match
0 Remediation Strategy
Confidence
Index
0
Threshold
Above

Above /
Below
Merge Link Activate/De-Activate
Activate/De-activate

Publish Outcomes to
Dependent External Systems

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2. Determining The Client Regulatory Journey

Once the data is consolidated, cleansed, remediated and a master copy is made available within the bank, it is
then pushed through to the Fenergo Enterprise Compliance Engine to undergo necessary compliance checks
across a range of regulatory requirements.

As an advanced rules-based engine, the Fenergo Enterprise Compliance solution aims to automate as much
of a banks compliance obligations as possible. With the help of a sophisticated decision tree, the system will
determine the entitys regulatory onboarding journey based on five key data inputs:

1 Legal entity type is it a fund, listed company, private company, trust etc.?

2 Country i.e. in what country is the legal entity being onboarded?

3 Legal entity role i.e. what role they will perform e.g. is it a swap dealer, broker, FX trader, a deposit
client etc.?

4 Booking entity i.e. from a banks perspective, against what legal entity will they be booked?

5 Products i.e. what products does the client want to trade?

These five key data points dictate the route or journey that the legal entity will go through in order to be onboarded
in compliance with all relevant regulations and risk management standards.

When all of these data points are inputted into the solution, Fenergos Enterprise Compliance solution will assign
a policy to that particular legal entity, which will determine the sub-routes the legal entity will need to go through
in terms of:

l the data that needs to be captured

By understanding the data and documentation
l the documentation that needs to be collected
needs upfront for all clients, financial institutions
l the KYC questions that need to be answered
can ensure a faster onboarding process, with
l all the regulations that need to be supported
fewer requests for information from clients.
l the risk assessment that needs to be undertaken
l the classifications that needs to be completed.

By understanding the data and documentation needs upfront for all clients, financial institutions can ensure a
faster onboarding process, with fewer requests for information from clients.

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Depending on the specific information related to the legal entity, each legal entity will take different routes based
upon the policy thats been assigned to them.

For example, if a US legal entity classified as a Swap Participant is being onboarded, we know that
being a US entity, the regulatory onboarding process will need to comply with the requirements under
the US Patriot Act. Its role as a Swap Participant also means that it needs to undergo classification under
the Dodd-Frank Act for the regulation of swap markets and the reform of OTC derivatives.

Likewise, if a UK private company was being onboarded, it would require full due diligence under the
3rd EU Money Laundering Directive, TDSI (tax) and FATCA classifications.

And all of this can be achieved even before knowing what products are to be traded.

In parallel to this, the Fenergo solution will direct the onboarding and compliance teams through a product-
based workflow, which can also alter the entitys journey through the client onboarding process.

For example, if a legal entity wanted to trade in a margin-based product e.g. FX or a money markets
product which doesnt touch credit, they effectively take different routes based upon the specific policy
assigned by the system, dictated by the legal entity type, role, products, country and booking entity.

KYC Dodd Frank FATCA AML Credit Ops Legal

Workflow CP data Trans Data Indicia Risk Calc App Client Packs Data

Execution Questions Questions Questions UBO Check Decision DCM Questions

Reg Docs Reg Reports W8/W9 Forms PEP & Sanct Minute Checklists Reg Docs

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3. Taking a risk-based approach to compliance

Financial institutions are encouraged to take a risk-based approach to Customer Due Diligence / Know Your
Customer. At its most basic level, this involves performing a risk analysis to determine where the money
laundering and terrorism financing risks are greatest.

To do this, financial institutions must be able to identify higher-risk customers, products/services and
geographies. Given that the risk status of these will change over time, financial institutions are tasked with
ongoing due diligence to ensure that their risk analysis is accurate at all times and captures evolving threats.
By identifying clients, products, services and geographies as higher-risk, financial institutions can commit the
appropriate resources to these entities in an effort to maintain
full compliance with anti-money laundering and counter
terrorism financing regulations. The risk profile of the legal By identifying clients, products, services and
entity will result in one of the following two scenarios:
geographies as higher-risk, financial institutions
l A standard level of due diligence can commit the appropriate resources to these
l An enhanced/comprehensive level of due diligence in entities in an effort to maintain full compliance
respect to those customers that are determined to be
of higher risk. This may be the result of the customers with anti-money laundering and counter
business activity, ownership structure, anticipated or terrorism financing regulations.
actual volume or types of transactions, including
those transactions involving higher risk countries or defined by applicable law or regulation as posing
higher risk, such as:

Correspondent banking relationships; and

Politically Exposed Persons (PEPs).

At the same time that the system is determining which route the client will take on its regulatory journey to
compliance, the Fenergo compliance engine will conduct an automatic risk assessment based on a macro
and micro selection of data.

To achieve this, the system measures all the key data inputs in an effort to calculate the risk involved in doing
business with a particular legal entity. This risk-based approach will also drive the journey that the legal entity
will undergo in order to be compliantly onboarded.

For example, if the entity wishes to be onboarded from Afghanistan, it will be automatically assigned a
high-risk rating and will have to undergo enhanced/comprehensive due diligence (EDD). Similarly, the rules
engine also automates the management of situations where some products may be credit-approved to be
traded in some regions but not others.

While risk assessments can either be enforced / overwritten depending on the entitlement of the user, most
financial institutions prefer to keep the risk calculation automatic to deter non-compliant behavior.

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4. Performing AML / CTF checks, establishing legal entity hierarchies and identifying the UBO

The next step involves conducting an AML check on the legal entity. Based on the data inputs and the results of
the risk categorization from the previous stage, financial institutions can choose to undertake either a simplified
AML check (if, for example, the parent company of the legal entity being
Its well known that corporations onboarded has been fully checked) or a full AML check based on the
different relationships of this legal entity. This will include the identification of
and other business legal entities beneficial owners, particularly the ultimate beneficial owner (UBO).
provide the ideal vehicles for
While a financial institution may be engaged in business with a single legal
money launderers and people entity, at the heart of its risk and regulatory management strategy is the need
involved in terrorism financing to have a full and comprehensive understanding of its overall corporate
structure and ownership model. Its well known that corporations and other
and other financial crimes. business legal entities provide the ideal vehicles for money launderers and
people involved in terrorism financing and other financial crimes. Under AML / CTF laws, financial institutions
are tasked with identifying the real ownership of all assets. The FATF (Financial Action Task Force) highlights the
identification of beneficial ownership as being a key element in the fight against money laundering and
terrorism financing.

Most financial organizations will typically develop complex matrices of interlinked companies, directors,
shareholders, guarantors and beneficiaries. It is critical, from a risk and regulatory point
of view that each of these inter-relationships are proactively tracked and managed.
The identification of
However, it is no understatement to say that the identification of beneficial owners,
required under AML / CTF and now FATCA regulations, is one of the most difficult parts beneficial owners and,
of the onboarding process. FATCA, in particular, introduces a requirement for a 10% in particular, the ultimate
threshold for beneficial ownership (if the person displays U.S. indicia), which is
significantly higher than the 25% norm that most AML/KYC reviews currently demand beneficial owner, should
(for low risk entities). Therefore, FATCA requires a level of Customer Due Diligence that form an integrated part
goes beyond that with which AML professionals are currently familiar.
of the overall entity due
The identification of beneficial owners and, in particular, the ultimate beneficial owner diligence process.
should form an integrated part of the overall entity due diligence process. By conducting
customer due diligence on the entity, directors, shareholders and beneficial owners in one integrated process,
identification of beneficial owners and the ultimate beneficial owner becomes easier.

In support of global and local AML / CTF requirements, Fenergos Enterprise Compliance Platform allows
financial institutions to capture and visualize complex and multi-dimensional hierarchies and associations
within the system i.e. legal associations that exist between legal entities and logical associations e.g. logical
groupings of legal entities.

These connections are illustrated visually on a canvas, which indicates the potential presence of more
associations that should be checked. The solution enables users to filter and drill down into specific relationship
and association types (e.g. shareholders, directors, beneficiaries (which can be as low as 25% of ownership in
compliance with AML / CTF laws or as high as 10% as dictated by FATCA) and third party administrators). Also
as part of this, new associations (e.g. new directors or shareholders) can be added to a legal entity and new
legal entities can be added to the company structure screen, without the need to leave the screen and re-enter
data on the legal entity capture screen. AML checks can then be conducted on individual persons or entire
entities at any of these points.

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A key aspect of the Fenergo Enterprise Platform solution is its ability to incorporate fresh market updates from
third party data providers (such as Dun & Bradstreet, Bloomberg, Dow Jones, Lexis Nexis, Bureau van Dyke,
Avox etc.) and track these data attributes for robust compliance and risk management purposes. This ensures
that all legal entity data is current and that any automated data change can be triggered for review if the data
update is deemed material e.g. change of company director or shareholder.

5. Conducting regulation-specific classifications

The final stage of the compliance exercise will involve classifying the legal entity in accordance to the
compliance regulations which govern it. This goes back to the data from the very first stage if the legal entity
is a UK-based private company, then it will need to undergo classification for TDSI, FATCA, FSCS (Financial
Services Compensation Scheme) eligibility and MiFID classifications. Similarly, a US Swap Participant would
need to undergo classification and compliance checks for Dodd-Frank and the Patriot Act. In addition to
classifying the legal entity, the financial institution must provide documentary evidence in support of the
derived classification.

Document Management

Many financial institutions will have already invested in Document Management Systems that can store
documents, images and files pertinent to the onboarding application. However, the fragmented and disjointed
nature of most financial institutions IT landscapes means that many of these Document Management Systems
do not connect across functions. Therefore, while the financial institution might have in its possession
documentary evidence to support an account opening or regulatory onboarding scenario, the lack of visibility
across the organization and connection points creating linkages between systems, these documents remain
siloed and unusable to the rest of the institution.

The data and documentation already stored (from the very first step in this process) can be used to provide
evidence of classification. A simple search will inform the user that relevant documentation exists (either in the
Fenergo solution or in other repositories across the institution) and is accessible through the Fenergo solution.

Underpinning the Fenergo Enterprise Regulatory Onboarding Platform is a

By storing all documentation sophisticated Document Management System which enables financial institutions
to store, automate, index, track and manage all documentation, contracts,
in this one central location,
collateral and agreements relating to the legal entity. By storing all documentation
as well as capturing copies in this one central location, as well as capturing copies of documentation held in
of documentation held in other repositories, Fenergos Document Management Solution provides a single,
other repositories, Fenergos holistic view of all client and counterparty documentation, saving the Onboarding
team from making unnecessary repeated requests for submission of additional
Document Management documentation. It also enables the Onboarding team to instantly determine any
Solution provides a single, outstanding documentation that needs to be collected across the institution.
holistic view of all client and Fenergos check-pointed processes ensure that no client can be onboarded until
counterparty documentation all documentation has been received, checked and approved, enhancing
institutional risk management capabilities. In addition, the solution also flags
the expiration of documentation, encouraging the Onboarding team to contact clients to update and resubmit
updated documentation. The Fenergo Document Management solution then stores all documents against each
entitys master file, which is available for viewing. Documents can be either stored in the Fenergo system or can
be an aggregation to a third party DMS which may be used downstream.

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Self-Service Portals
Any outstanding documentation remaining to be collected can be done seamlessly and efficiently through an
integrated client portal, which allows the client to upload documentation in a secure and timely fashion. This
speeds up the time it takes to collect documentation from individuals and entities (such as certificates of
incorporation, directors identification etc.) and saves on the cost of manual document collection processes
(e.g. postage, processing, validation, re-processing and storing of paper copies) and the associated process
inefficiencies that arise from this. Furthermore, a streamlined client portal can improve accuracy of client
classification through step-by-step form-filling processes and reduce error rates through real-time validation.
This process helps to expedite the regulatory onboarding process for the client.

Moreover, the Fenergo Enterprise Platform allows

financial institutions to access data from various
sources to support classification. For example, in
the case of FSCS, data can be extracted from
financial accounts to drive this classification
process.
A streamlined client portal can improve accuracy of client
classification through step-by-step form-filling processes
and reduce error rates through real-time validation.

At the end of the classification process, the due diligence is marked for review by an MLRO.

Example: Fenergo FATCA Self-Service Portal:

The Fenergo FATCA Self-Certification Portal is a perfect example of a self-service portal outlined above.
A secure, cloud-based, multi-lingual solution, it enables financial institutions to easily collect, manage and
validate W8 and W9 forms for FATCA classification. Accuracy is guaranteed through a step-by-step
form-filling process and real-time validation which, in turn, increases the accuracy of the derived
classification. In addition, it speeds up the FATCA data collection process and reduces the overall cost of
collecting data. Improved efficiencies ensures a positive client experience.

AUTO-CLASSIFIED

CLIENT
DATABASE(S)

FATCA
TRANSITIONS CLASSIFICATION
LAYER VALIDATION QUEUE AND DOCUMENTS

Indicia
Weightings
Risk Assessent
Auto-Classify

SELF
CLASSIFICATION CLIENT
PORTAL COMMUNICATION
W-8 FORMS
W-9 FORMS

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4 Let the Onboarding Commence

Lets go back briefly to the lifecycle concept. A legal entity approaches a financial institution to become a client.
In a nutshell, they start off with Sales who hands them over to the Onboarding Team, which then orchestrates a
variety of different processes to ensure that the client can be onboarded, which includes

To effectively manage compiling the right data on the legal entity, passing this through to Compliance for
necessary checking and approvals, through to Credit for credit approval, to the Operations
this process, end-to- and Technology Teams and to Legal to ensure everything is in order. As explored in the
end, the Onboarding previous chapter, the clients regulatory journey is determined by a policy generated by the
Fenergo rules engine based upon the inputted data pertaining to the individual client entity.
Team needs oversight The legal entity then ends back up with the Onboarding Team for final onboarding.
over the entire process
to ensure it is executed A clients onboarding journey takes them through checks and approvals across, at least,
five different functional areas within the bank before they are ready to be onboarded.
on-time and as To effectively manage this process, end-to-end, the Onboarding Team needs oversight
efficiently as possible. over the entire process to ensure it is executed on-time and as efficiently as possible.

Dashboard Management and System Views

Fenergos Client Onboarding Lifecycle Management provides Onboarding Teams with transparency over the
entire onboarding process, from start to finish, and visibility into a clients application. This is achieved through
specific dashboard management capabilities and user-unique system views that enable the Onboarding Team,
and every other team that impacts the client onboarding process, to view their specific assigned tasks lists.

To provide the necessary oversight to the Onboarding Team, they are afforded a birds-eye view of
the entire process in a single screen that allows them to see at a glance:

l where a client onboarding application currently lies (which department, team, individual)

l the case types and RAG (Red, Amber, Green) statuses against each assigned partys tasks

what has been completed or not completed

what Service Level Agreements (SLAs) have been met or are in danger of being missed

what bottlenecks exist and how to expedite the onboarding process.

Ongoing Due Diligence

A central concept underpinning the lifecycle approach to regulatory onboarding is the idea that, over time as
the client continues to trade with and through the financial institution, it will generate even more data that may
require the client to re-enter due diligence processes. Fenergos Enterprise Platform ensures that regular and
ad-hoc periodic reviews can be carried out on all clients and entities based on the risk-rating attributed to the
client entity. For example, for low risk clients, a less frequent periodic review can be set (e.g. 24 months), for
medium risk clients it can be set for every 12 months and high-risk clients can be set for every 3 or 6 months
depending on the risk appetite and resources of the financial institution.

Furthermore, Fenergos solution also manages

event-driven reviews based on any materially Any materially significant data change (e.g. change of
significant change in data (e.g. change of data
data circumstances like a change of director, signatory or
circumstances like change of director, signatory
or change of jurisdiction etc.), which automatically jurisdiction etc.) is flagged and automatically triggers a new
triggers a new compliance process. This ensures compliance refresh process.
complete compliance with all regulatory
requirements on an ongoing basis throughout the entire lifecycle of the client.

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5 Benefits of Fenergos Approach:

There are many benefits to using the Fenergo Enterprise Platform but well concentrate here on what we think
makes the Fenergo platform particularly stand out from the competition.

Solving Many Regulations with a Single Solution

Given the convergence of implementation timeframes for many of the newer regulations, taking a traditional
approach to compliance management (which involves having separate programs, budgets, teams and
strategies devoted to each compliance stream) is simply unsustainable and may lead to missing key
regulatory deadlines.

Fenergos approach is slightly different. The Fenergo Enterprise Platform takes a horizontal approach to
compliance. This involves looking across all regulations to determine commonalities that can be used to build a
compliance program that solves all of these at once. Approximately 70 - 80% of regulations contain shared
commonalities that can be solved together, leaving only a 20 30% delta that needs to be catered for on a
regulation-by-regulation basis. The advantage to this is that only one compliance team, budget, program and
strategy is needed. In addition, all data and documentation collected as part of one compliance effort may be
re-used for another compliance effort. The ability to re-use data and documentation and leverage up to 80% of a
solution to comply with all regulations will help financial institutions to meet regulatory deadlines on time, and
also save the compliance function on the cost of solving each and every regulation separately.

Taking a Risk-Based Approach for Improved Decision Quality

By automating as much of the risk calculations, measurements and classifications as possible based on key
data inputs, the Fenergo solution enables financial institutions to introduce a level of consistency in and
improve the quality of decision making processes in their organizations. This helps to bolster the compliance
program, and ensure that all decisions taken are made in full compliance with regulatory approval and bank
policy. A risk-based approach poses huge benefits to financial institutions, enabling them to avoid punitive
financial damages and help protect their reputational brand.

Future-Proofed Solution Investing Today for Tomorrows Regulations A risk-based approach

The Fenergo platform is a single, end-to-end platform that is designed to support poses huge benefits to
compliance teams as they enable financial institutions to solve and comply with immediate financial institutions,
regulatory challenges easily and efficiently, whilst future-proofing against continually
evolving or newly introduced regulations. enabling them to avoid
All Fenergo solutions are out-of-the-box and fully configurable, providing institutions with
punitive financial
the ability to adapt to changing regulations without the need for heavy IT involvement. This damages and help
helps financial institutions to manage their compliance programs in an ever-evolving and
protect their
ever-changing environment.
reputational brand.
Fenergos Enterprise Compliance Platform can be easily configured to solve all
classification-based regulations such as KYC, LEI, Dodd-Frank, EMIR, FATCA, MiFID II etc. Its sophisticated
configuration suite is specifically designed to solve for all of these regulations and more that may come
on-stream over time.

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6 Total Cost of Ownership (TCO)

At the very heart of the Fenergo Enterprise Platform lies due consideration for Total Cost of Ownership.
Re-usability of documentation and data stored in other systems is a core and running theme through the
entire, end-to-end platform.

Given that most financial institutions have invested heavily in some or all of the areas of client and counterparty
data management, enterprise compliance management and client onboarding lifecycle management, they can
choose the level at which they want the Fenergo platform or individual modules to perform.

For example: with respect to its advanced workflow capabilities, for some financial institutions the Fenergo
platform acts as a gateway or a dynamic workflow overlay an overarching workflow that directs other
technologies in performing tasks. When these tasks are performed and completed,
they are passed back to the gateway, which will determine what it does next.
Financial institutions
As an agnostic solution, the Fenergo Enterprise Platform operates as a complementary can use the Fenergo
technology. This means that financial institutions can use the Fenergo Enterprise Platform Enterprise Platform or
or its individual modules alongside their current IT infrastructure, eliminating the need to
deploy a rip and replace strategy. its individual modules
alongside their current IT
Built for connectivity, the Fenergo Enterprise Platform is architected to incorporate easy
integration and access to other systems, solutions and repositories. As an open solution
infrastructure, eliminating
based on open standards with APIs that facilitate easy bi-directional integration for the need to deploy a rip
downstream and CRM systems, the Fenergo solution also contains out-of-the-box
and replace strategy.
connectors for most major data providers, which come as standard. This allows for easy
access to data and documentation that may be held in siloed systems across the financial institution.
In this way, data only needs to be captured once, but can be used many times across various systems and
regulatory requirements.

Driving Value
At the very end of this process, financial institutions should have a fully trading legal entity that complies with
all regulations as they pertain to its specific circumstances. However, thats not all they have. The process of
cleansing, remediating and mapping the data fields
to create a more holistic view of the client means
The process of cleansing, remediating and mapping the
that this information can be used to drive cross-sell
and up-sell activities. Knowing exactly what data fields to create a more hilstic view of the client means
products the client trades and, perhaps more that this information can be used to drive cross-sell and
importantly, what it doesnt trade, represents a
tangible revenue generating opportunity, helping up-sell activities.
the financial institution to drive future profitability for the organization.

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7 Conclusion:
In this ever-changing world of regulatory upheaval, one thing is certain regulatory change is here for the
long-haul. Right now, we are witnessing unprecedented regulatory focus as regulators strive to pass and enact
regulations in an effort to stave off another financial crisis. The moveable feasts that characterizes constantly
moving regulatory timeframes is creating converging implementation dates, putting even more pressure on
stressed financial institutions and their data, compliance and onboarding teams. A piecemeal approach to
regulatory compliance just simply will not do and will only serve to make financial institutions miss some critical
regulatory deadlines.

In this paper, we have illustrated how Fenergos approach to regulatory onboarding compliance can be (and is
being) implemented by leading financial institutions across North America, UK and Europe. The premise one
platform to handle all party data, regulatory compliance and onboarding initiatives is a powerfully easy way of
handling multiple regulations simultaneously and enabling clients to be onboarded within stated SLAs.

Its a virtuous cycle:

l Aggregate all client / counterparty data lying in various systems across the organization

l Clean, remediate and organize this data

l Create a more accurate and holistic master file of the client / counterparty and populate through
other connecting systems

l Take five key data inputs and ensure full compliance with (multiple) regulatory demands

l Provide visibility (through dashboards) to the onboarding team and all inputting parties to onboarding
the client (legal, credit, tech & ops etc.) and ensure timely onboarding of clients (through optimized
workflows)

l Sow the seeds for future upselling and cross-selling opportunities through an enhanced, timely,
satisfactory onboarding service.

Fenergo is deeply committed to enabling financial institutions to meet and comply with all regulations both
today and in the future. Configurability, interoperability, re-usability and flexibility are core to our technological
infrastructure, providing financial institutions with the ability to comply with existing and new regulations, without
the need for heavy IT involvement.

If you would like to see Fenergos Regulatory Onboarding solution in action, please email info@fenergo.com
for a free demonstration or more information.

Marc Murphy, Fenergo CEO

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If youd like more information on Fenergos Client & Counterparty Data Management, Enterprise
Compliance or Client Onboarding Lifecycle Management solutions or would like to discuss any
elements of this paper, please email us at info@fenergo.com or visit www.fenergo.com.

About Fenergo (www.fenergo.com):

Fenergo is an award-winning provider of enterprise Customer Lifecycle Management software solutions for
financial institutions.

Amid global regulatory reform, banks and securities firms are faced with significant challenges and sweeping
regulatory changes. In particular, financial institutions face operational upheaval as a result of stiff regulatory
enactments and unprecedented financial, operational and reputational risk arising from non-compliance and
process failures.

Fenergos market-leading Enterprise Platform is designed to streamline the often complex operational
interactions of client lifecycle management by orchestrating onboarding, regulatory compliance and KYC
activities across all touch-points within the instution. These solutions integrate with leading market and third
party data providers, monitoring for corporate actions.

Together with the Fenergo suite of regulatory, classification and event propagation tools, Fenergos Enterprise
Platform truly manages the end-to-end client regulatory and compliance lifecycle in an institution. Comprised of
three core software solutions, Fenergos Enterprise Platform includes:

Client & Counterparty Data Management

Underpinned by a comprehensive Legal Entity Data Management framework, Fenergos Client & Counterparty
Data Management solution enables the tracking, merging and grouping together of various identifiers to create a
more accurate and holistic single view of the client and all associated or linked entities and individuals
enhancing risk management and improving client experience and profitability.

Enterprise Compliance Platform

Fenergos Enterprise Compliance Management solution ensures compliance for the financial institution
throughout the entire lifecycle of the customer and across global compliance and regulatory directives, such as:
Jurisdictional KYC (Know Your Customer), Client Due Diligence Checks, Anti-Money Laundering Checks,
Ultimate Beneficial Ownership Checks, FATCA, MiFID, Dodd-Frank and EMIR Classifications, as well as
compliance with the Patriot Act and the 3rd and 4th EU Money Laundering Directives.

Client Onboarding Lifecycle Management

Fenergos Client Onboarding Lifecycle Tool enables financial institutions to provide a quick and efficient
onboarding process for new and existing clients, whilst ensuring the highest level of compliance with
ever-evolving regulations all the way through the client lifecycle (at client take-on and ongoing due diligence
stages).

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About the Author:

Marc Murphy is the co-founder and CEO of Fenergo since its inception
in 2009. A financial technology specialist with more than 15 years
experience developing and delivering enterprise software to leading
financial institutions, Marc is dedicated to solving issues surrounding
regulatory onboarding and data management. Marc is a software
engineering and MBA graduate of Dublin City University.

More Fenergo Publications:

Check out the Industry Knowledge section of www.fenergo.com for

more industry publications such as:

l Getting to Grips with Client & Counterparty Data Management

l Client Onboarding: Solving the Challenges, Maximizing the

Opportunities

l The Road to FATCA

l Solve Classifications, Not Just FATCA

Contact Us:
To contact us for more information on our solutions or this paper, please:
Email us: info@fenergo.com
Visit us: www.fenergo.com

Follow us on:
LinkedIn: Fenergo
Twitter: @Fenergo

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