Patent Application
20230401581
The present invention relates generally to the field of client screening. More specifically, the present invention pertains to systems, methods, and interfaces for client identity screening in the financial services industry.
Compliance with newly enacted security rules and regulations in the financial services industry has placed additional burdens on broker-dealers to conduct client identity screening for both new and existing clients. With the recent promulgation of the USA Patriot Act, for example, broker-dealers are now required to develop a Customer Identification Program (CT) that implements reasonable procedures (1) to collect identifying information about their customers upon opening an account; (2) to verify their customer's identity; (3) to maintain records of the information used to verify the customer's identity; and (4) to determine whether the customer appears on any list of suspected terrorists or terrorist organizations. Financial institutions that are required to comply with such rules include, for example, securities brokers and dealers, banks and trust companies, currency exchanges, insurance companies, savings associations, credit unions, mutual fund companies, futures commission merchants, futures introducing brokers, as well as other organizations operating in the financial services industry. In some cases, organizations outside of the financial services industry may also be obligated to comply with these rules and regulations.
As a part of their Customer Identification Program obligations to collect and verify customer information, many financial institutions are required to develop procedures to collect relevant identifying information regarding each customer's name, address, date of birth, and taxpayer identification number such as Social Security Number or government-issued passport number. Verification of the customer's identifying information typically occurs with traditional documentation such as a driver's license or passport, although other alternative methods may be implemented provided the documentation meets certain threshold requirements.
In addition to collecting and verifying customer information, financial institutions must also implement procedures to check their customers against lists of suspected terrorists or terrorist organizations maintained by the government. To fulfill this obligation, some financial institutions elect to partner with a third-party vendor that specializes in performing client identity verification. An example of such CIP vendor can include RemitPro, LLC of Omaha, Nebraska, which provides a client validation software module under the trade name RISKALERT. Access to the CIP vendor's verification program is typically accomplished by a direct connection or via an Internet portal, and generally involves the transmission of client identifying information to the vendor for cross-checking the customer against multiple databases. Once checked against these databases, a message indicating whether the verification passed, failed, or requires further review is then provided back to the requesting party. In some cases, additional information about the customer may be sent back to the requesting party in the event the verification request was unsuccessful, or if the customer's name appears on a watch list of suspicious individuals or organizations.
More automated systems for client identity screening are becoming increasingly necessary in the financial services industry as a result of the additional requirements placed on compliance managers and other corporate officials responsible for compliance with Customer Identification Programs. With respect to some broker-dealers, for example, compliance with the Customer Identification Program is typically accomplished by the same compliance manger or officer responsible for overseeing compliance with other securities provisions such as trade confirmations, suitability provisions, etc., placing additional burdens on these individuals to ensure full compliance.
Although many financial institutions are able to offload some of their identification and verification obligations to CIP vendors, the costs associated with such offloading can be significant. Existing software programs used by financial institutions to ensure CIP compliance is often conducted on a per account basis, and do not provide a mechanism for filtering existing clients that have already been screened for compliance and/or who have certain accounts that may be exempted from compliance. In some cases, the software program employed may not provide the ability to specify more detailed information about the customer, or may not associate together multiple accounts held by a single customer. Because many CIP vendors charge on a per item basis each time a verification request is performed, the practice of duplicating client identifying information used by many institutions often results in an increase in the total cost of compliance. In addition, the practice of submitting duplicative entries for verification often increases the storage space required to maintain records of the information used to verify the customer's identity, further adding to the total cost of compliance
Accordingly, there is a need for automated solutions for performing client identity screening in the financial services industry in order to more efficiently meet security rules and regulations.
The present invention pertains to systems, methods, and interfaces for client identity screening in the financial services industry. An illustrative system for screening clients for security compliance can include a database adapted to store client account information and verification status information, a client screening engine adapted to filter client account data based on one or more filtering criteria, and a graphical user interface adapted to selectively display client account information and verification status information for one or more clients on a screen. The client screening engine can be configured to automatically update the database each time a new account is opened for a new or existing client, when a name or address change of a client is received, and/or when a request is received from a representative or supervisor. The engine can be further configured to associate account data from multiple accounts together via a unique client identification number.
An illustrative method of screening clients for security compliance can include the steps of initiating a client screening request and receiving client account data for one or more new or existing clients from an account custodian, and associating such account data with a unique client identification tag for each client. Once associated, the client account data can then be filtered based on one or more filter criteria to provide a filtered subset of the client account data. In some embodiments, for example, such filtering can include identifying whether the client has been previously verified, or determining whether the account prompting the verification request is exempted from compliance. Once filtered, a dataset containing only unverified clients can be outputted to a Customer Identification Program (CIP) vendor for identity verification. A report indicating the verification status of each client can then be provided back to the user indicating the verification status of each client.
In some embodiments, a graphical user interface may be employed to permit a user to filter various client account data for display on a display screen. The graphical user interface can include a submission screen for use in submitting client account data to the CIP vendor, and a verification screen for notifying the user of the verification status of one or more clients submitted for verification. The graphical user interface can include various fields to facilitate client identity screening, including a client verification field, a filtering field, an account type field, and an action-to-take field. In some embodiments, a separate reporting screen may be used to display client verification information along with other account information pertaining to a particular client or clients.
The following description should be read with reference to the drawings, in which like elements in different drawings are numbered in like fashion. The drawings depict selected embodiments, and are not intended to limit the scope of the invention. Although examples of various systems, methods, and interfaces are illustrated in the various views, those skilled in the art will recognize that many of the examples provided have suitable alternatives that can be utilized. In addition, while the illustrative systems, methods, and interfaces are described with respect to broker-dealers, it should be understood that many of the elements and steps described herein can be applied to client identity screening for other financial service organizations or other organizations where client identity screening is desired.
Referring now to
As a part of its services, the broker-dealer 12 can act as an intermediary for the purchase of private and/or public securities from a number of account custodians 24,26,28. For example, the account custodians 24,26,28 may comprise mutual fund companies, annuities companies, insurance companies, or other such organizations or businesses licensed to sell particular types of securities, either directly to the clients 14,16,18,20 or through an intermediary such as the broker-dealer 12. A first and second account custodian 24,26 of the broker-dealer 12, for example, can include mutual fund firms such Vanguard Group, Inc. or American Funds Service Company whereas a third account custodian 28 of the broker-dealer 12 can include an insurance provider such as the Jefferson National Life Insurance Company. In some cases, one or more of the account custodians 24,26,28 can comprise a separate broker-dealer licensed to conduct business on behalf of the broker-dealer 12. In some cases, the broker-dealer 12 itself may be an account custodian that provides its own private-label brand of securities to its clients 14,16,18,20. An example of a situation where the broker-dealer 12 is also an account custodian may be Merrill Lynch & Co., Inc., which sells its own private-label brand of securities.
The clients 14,16,18,20 to the broker-dealer 12 can include personal investors and/or institutional investors who wish to purchase securities or securities-related products from one or more of the account custodians 24,26,28. The clients 14,16,18,20 can be existing customers having an existing business relationship with the broker-dealer 12, or can be new customers seeking to open an account with the broker-dealer 12.
Each of the account custodians 24,26,28 can have a respective database 30,32,34 for storing account information 36,38,40 for each client. Account information 36,38,40 maintained by the account custodian will typically vary depending on the type of services provided. In some cases, state and federal securities laws will dictate the type of account information 36,38,40 to be maintained by the account custodian 24,26,28. By way of example and not limitation, account information 36,38,40 stored within the databases can include customer name, address, contact information, birth-date, social-security number, net-worth, investment objectives, account type(s), number of shares, trade dates, confirmation dates, activity dates, stock powers, etc.
The broker-dealer 12 can further include a broker-dealer (B/D) database 42 for storing account related information received from the clients 14,16,18,20 and account custodians 24,26,28. As a part of its CIP 22, the broker-dealer database 42 may store various client identifying information, including customer name, address, contact information, birth-date, and social-security number. Information used to verify the client's identity such as drivers license number or passport number may also be stored within the broker-dealer database 42 along with the dates and times on which such records were relied upon. Other account-related information such as account type(s), number of shares, trade dates, confirmation dates, activity dates, stock powers, etc. may also be stored within the broker-dealer database 42.
The broker-dealer 12 can be further partnered with a third-party Customer Identification Program (CIP) vendor 44 that specializes in performing client identity verification. The CIP vendor 44, in turn, can be configured to scan one or more sources 46 to confirm the identity of the client. Examples of sources 46 used to cross-check a client's identity may include property tax records, legal records, public lien recordings, bankruptcy records, federal and state income tax records, driver's license records, credit-bureau records, etc. The CIP vendor 44 may also cross-check the client's identity against a list of terrorists or terrorist organizations maintained by various branches of the government. Typically, the CIP vendor 44 will provide identity verification based on the client's social security number (SSN) or other unique client identifier.
In a conventional CIP verification system, the addition of one or more new accounts 58,60,62 will typically prompt the broker-dealer 12 to send out a request to the CIP vendor to verify the client's identity. Such identity verification request is usually made without regard to whether a previous verification request for that client was made, or whether the type of account being established requires such verification. If, for example, each of the new accounts 58,60,62 to be opened are accounts that fall under the provisions of the Employee Retirement Income Security Act (ERISA), existing verification systems would prompt the broker-dealer 12 to request client verification from the CIP vendor even though such accounts are specifically exempted from compliance from the provisions of the USA Patriot Act. In the illustrative case depicted in
The client screening engine 66 can be linked to a submission/receiving engine 78, which provides software and/or hardware functionality for communicating with one or more third-party CIP vendors 80 capable of performing client identity verification. The submission/receiving engine 78 can include, for example, a software module operating on an Application Service Provider (ASP) using a platform such as Linux®, Oracle 9i®, and/or Java® to facilitate communications and interfacing between the client screening engine 66 and each CIP vendor 80. The submission/receiving engine 78 can be integrated with client screening engine 66, as indicated generally by the dashed box 82, or can comprise a separate module linked to the client screening engine 66.
Initiation of client screening engine 66 can occur automatically in response to a triggering event such as the opening of a new client account from an account custodian 84, a name or address change received from the account custodian 86, and/or a client screening request received from a representative or supervisor 88 desiring to verify the identity of one or more new or existing clients. As indicated generally by box 90, the client screening engine 66 can also be initiated in response to other triggering events. Examples of other triggering events 90 may include, but are not limited to, a change in marital status by a client, a change in citizenship of a client, an inconsistency in client identifying data between one or more accounts held by an account custodian, etc.
The client screening engine 66 can be configured to filter account data provided to the user's 74 display screen 76 allowing the user 74 to select only certain clients to be submitted for screening based on one or more filtering criteria. The graphical user interface 72 may permit the user 74 to display a list of only those clients that fall within a particular category, allowing the user 74 to better manage their customers. In some embodiments, for example, the graphical user interface 72 can be configured to selectively display a list of only those clients that have not been previously submitted for client identity verification with the CIP vendor 80. Alternatively, and in other embodiments, the graphical user interface 72 can be configured to selectively display only those clients whose identity has been previously verified. Other filtering criteria for managing the client screening process can be further understood with respect to
The account data file 92 can contain information about each customer's account including customer account numbers, current and past account holdings, investment objectives for the account, etc. The contact information file 94, in turn, can contain personal information for each client including the customer's full name, nick-name, address, address type (e.g. prime residence, secondary residence, business address, etc.), phone number, fax number, E-mail address, etc. In some cases, the contact information file 94 may contain more specific information about the customer including interests and important dates (e.g. anniversary dates, graduations dates, etc.). The calendar information file 96 contains a list of appointments as well as other items provided by the users 74. A client screening log file 102 can be recorded within the database 68 for maintaining records of the information used to verify each customer's identity. Information that can be stored within the client screening log file 102 can include, for example, the driver's license number, passport number, or other document used to confirm the identity of the client as well as the dates and/or times upon which such documents were relied upon. Data relating to whether the each client has been screened for identity verification can also be stored within the client screening log file 102.
The correspondence history data file 98 can be provided to store the correspondence history between each user and their customers. The user activity data file 100 can store information related to each user's activity on the system. General ledger data file 104 can store a general ledger for the broker-dealer firm. The securities ledger data file 106, in turn, can contain records for each buy and sell executed by the broker dealer firm. The trade blotter data file 108 can be used to store each trade executed by the broker-dealer.
Referring now to
Once a client screening request is received at block 114, the client screening engine may then associate the account data received from the account custodian with a unique client identification tag for each client, as indicated generally by block 116. The accounts held by the account custodian can be associated to each client via a client identification tag such as social security number (SSN), passport number, or other unique number. Multiple accounts held by a single client can be associated together with the client's identification tag. If, for example, the client screening request is initiated when the client opens a new account number, the new account number along with any existing accounts owned by the client can be associated together via the client identification tag. In some embodiments, the step 116 of associating client account data with a client identification tag can occur by comparing data received from the account custodian with account data already stored within the broker-dealer database.
Once the account data received from the account custodian is associated with each client, the client screening engine may next identify for each client whether the client's identity has been previously verified, as indicated generally by block 118. If at block 118 the client screening engine determines that a particular client's identity has been previously verified, the engine can be configured to exclude that client from a list of clients to be submitted for screening by the CIP vendor.
If the client screening engine determines that a particular client's identity has not be verified at block 118, the engine may next determine whether an exception exists to exclude the account from screening, as indicated generally by block 120. If, for example, a new account request from the account custodian is responsible for triggering the client screening request, the client screening engine can be configured to determine whether the account is of a type that requires client screening. In some embodiments, for example, the client screening engine can be configured to determine whether the account to be opened falls under ERISA where client screening under the USA Patriot Act is exempted. The client screening engine may further determine if the account falls under another applicable exception implemented under the Customer Identification Program (CIP). If the account to be opened falls within an exception, the client screening engine can output an identification exception report indicating that the account has been exempted from client screening, as indicated generally by box 122.
If the client's identity has not been previously verified at box 116 and the triggering even causing the client screening request does not fall within an exception, the client screening engine may next filter the client account data received from the account custodian and output a filtered subset of the client account data to the user for review, as indicated generally by block 124. Filtering of the client account data may occur, for example, based on whether the user's clients have been previously screened by the CIP vendor, whether the client is a new client, and/or whether the client screening process for the client has been suppressed or bypassed. Filtering can also occur based on the date in which the account was opened, the representative or supervisor responsible for overseeing that customer's account, or other filtering criteria, as desired.
For those clients that the client screening engine determines have not been previously screened and who do not fall within a screening exception, the engine may prompt the user to output a dataset of unverified clients to be screened to the CIP vendor, as indicated generally at box 126. Submission of the client names to be verified by the CIP vendor may occur, for example, by the user clicking a “Request Verification” icon on the graphical user interface. Client information sent by this request may include the customer's social security number (SSN), name, birth-date, and address. Other identifying information may also be sent to the CIP vendor, if necessary.
From the information received, the CIP vendor may then compare such information against one or more databases to verify the customer's identity. As indicated generally by block 128, the verification status for each submitted client within the dataset can then be returned back to the submission/receiving engine. Information returned from the CIP vendor can include an indication whether the verification was successful such as “pass”, “fail”, or “review”. In some cases, additional information about the client or the reason why the verification search was unsuccessful can be delivered to the user. As indicated generally by block 130, the user can be notified if the identity of one or more of the clients was unverified or requires further action. In those instances where the individual or organization being screened appears on a list of terrorists or terrorist organizations, a suspicious activity report (SAR) can be displayed on the user's screen prompting the user to take further action, if necessary.
Once the verification status information 132 is applied against the business logic rule-set 136, an account screen including a verification status indicator can then be provided to the user via the display screen, as indicated generally by box 140. The account screen 140, for example, can be configured to display a stop light icon 142 with a green light indicating that the verification for the client was successful, a yellow light indicating that a problem occurred in the verification process and that further action is required, or a red light indicating that the verification was unsuccessful. If desired, a text message or other status indicator may also be display on the screen in addition to, or in lieu of, the stop sign icon 142.
From the account screen 140, the user may then access the client's identification history in order to view more specific information about the client's identification history, as indicated generally by box 144. From the account screen 140, the user may then chose to submit the client's information for verification, suppress or hold the submission of client data until a future date or time, or bypass the verification process altogether. If necessary, the user may also request verification of the client directly from the account screen 140, sending a request to the CIP vendor 80 to cross-check the client's identifying information against their databases.
Referring now to
Selection of the Daily Administration pull-down menu 152 on the main menu screen 150 causes a selection box 160 to appear on the screen, providing the user with the ability to select among several administrative tasks to be performed. The selection of a “RemitPro Submission” section 162 within the selection box 160 causes the graphical user interface 148 to display a client verification submission screen 164, as further shown in a second screen shot depicted in
An account type section 178 of the worktable 166 can be configured to display the type of account corresponding with each client account. An icon selection bar 180 can be provided to permit the user to indicate the type of account to be associated with each account. As depicted in another illustrative screen shot in
As can be further seen in
In some cases, other account information may be displayed on the worktable 166. A reconciled date section 190, for example, can be provided to display the date in which the account was last reconciled. A balance section 192, in turn, can be provided to display the current balance of the account. To facilitate viewing, selection of each of the heading sections can cause the graphical user interface 148 to sort each line within the worktable 166 based on entries within that section, in either ascending or descending order. With respect to the primary social security number section 174, for example, selection of that section heading can cause all of the field entries within the worktable 166 to be arranged numerically in either ascending or descending order based on social security number.
An action-to-take section 194 of the submission screen 164 can be provided to permit the user to select a screening action to be performed for each account entry within the worktable 166. An action icon selection bar 196 for each account entry can be displayed on the submission screen 164, providing the user with feedback on the current action to be taken for that account. As shown in another screen shot in
A filtering selection bar 206 located on the submission screen 164 can be provided to permit the user to filter entries within the worktable 166 based on one or more filtering criteria. As shown in another screen shot in
The submission screen 164 can further include a number of icon buttons to permit the user to perform other functions on the worktable 166. As shown in another screen shot in
Once the user has selected each account entry in which client screening is desired, an “Update Accounts” icon button 222 provided on the submission screen 164 can be selected, causing the submission/receiving engine to submit customer identifying information to the CIP vendor information for each account in which the “Submit” field 200 is selected under the action-to-take section 194. The client screening engine can be configured to associate each account owned by a particular client to a unique client identification tag so that only one submission for verification is made when the client has multiple accounts.
If at any time the user desires to view a report of any customer accounts in which a customer identification exception was made, the user may select the Reports pull down menu 156 from either the main screen 150 or submission screen 164, causing the graphical user interface 148 to display the option to generate various reports relating to client screening as well as other functions. As shown in another screen shot in
Selection of a “Customer Identification Exception” field 226 within the menu box 224 can cause the graphical user interface 148 to display a report screen 228, as shown in another screen shot in
The selection of each client listed on the report screen 228 can cause an account summary screen 242 to be displayed on the screen, providing the user with more specific information about the client, as shown in another screen shot in
A “Request Verification” icon button 260 provided on the verification screen 246 can be selected to immediately perform a verification request of the selected client. An “Override Status” icon button 262, in turn, can be provided to permit the user to override client screening for that selected client. If desired, a text box 264 provided on the verification screen 246 can be used to enter the reason or reasons for the override. A date/time stamp may also be provided to record the date and time in which the resubmission or override request is made.
A “Customer Identification History” section 266 of the verification screen 246 can be configured to display the history of any previous verification requests that may have been performed for the client. Information that can be displayed in this section can include, for example, the date and/or time that each verification request was made, the verification status of each request such as “pass”, “fail”, or “review”, the client information relied upon by the CIP vendor involved in the identity verification, the name and contact information of the CIP vendor involved in the identity verification, the representative or supervisor responsible for making the verification request, etc. In some cases, additional information received from the CIP vendor regarding the verification search may be further displayed on the screen.
Once a client screening request is received, the client screening engine 276 may then associate the account data received with a unique client identification tag 278 (e.g. Social Security number (SSN)) and determine if the client's identity has been previously verified. If the client screening engine 276 determines that a particular client's identity has not bee verified, the client screening engine 2176 may then determine whether an exception exists to exclude the account from screening, as indicated generally by block 280. In those embodiments where the Customer Identification Program is targeted for compliance under the USA Patriot Act, for example, the client screening engine 276 can be configured to determine whether the account falls under an ERISA exception where screening is unnecessary.
As indicated by box 282, the submission screen 164 can be configured to display client account data to the user, which may then be filtered based on filtering criteria such as verification status (e.g. pass, fail, review), submission status (e.g. submit, hold, bypass), date, and/or representative or supervisor. As further indicated by box 282, the submission screen 164 can be configured to display the worktable 166 to the user. From this worktable 166, the user may then generate an ID exception report, as indicated generally by block 286. The client identifying information can then be submitted for verification by the CP vendor 80, as indicated generally by block 288. The verification screen 246 can also be displayed, as indicated generally by block 290, providing the user with notification of the verification status of the client or clients submitted for verification.
Having thus described the several embodiments of the present invention, those of skill in the art will readily appreciate that other embodiments may be made and used which fall within the scope of the claims attached hereto. Numerous advantages of the invention covered by this document have been set forth in the foregoing description. It will be understood that this disclosure is, in many respects, only illustrative. Changes can be made with respect to various elements described herein without exceeding the scope of the invention.
| Number | Date | Country | |
|---|---|---|---|
| Parent | 17335938 | Jun 2021 | US |
| Child | 18457916 | US | |
| Parent | 16437939 | Jun 2019 | US |
| Child | 17335938 | US | |
| Parent | 15621343 | Jun 2017 | US |
| Child | 16437939 | US | |
| Parent | 14942192 | Nov 2015 | US |
| Child | 15621343 | US | |
| Parent | 14676561 | Apr 2015 | US |
| Child | 14942192 | US | |
| Parent | 14100534 | Dec 2013 | US |
| Child | 14676561 | US | |
| Parent | 11421686 | Jun 2006 | US |
| Child | 14100534 | US |
