Corporate Signals: Enabling better KYC

Over the past month (18 February – 18 March) despite the challenging environment we are in, in the UK alone there were almost:

• 60,000 company incorporations 
• 125,000 officers added to newly incorporated or existing companies, with almost 44,000 officers removed from companies
• 51,000 companies that changed status

Did you get all that? 

Surprisingly, most organisations doing statutory anti-money laundering checks (so called Know Your Customer or KYC) didn’t. They typically check when companies become new clients, and then at a set interval after (often as long as 3 years ago). 

This not only gives criminals an open goal, but it also means that organisations’ databases are full of inaccuracies and that clients have to go through the whole KYC process even though nothing might have changed

This is a system that works for no-one.

That’s why OpenCorporates has developed Corporate Signals (released in its alpha version last year as Corporate Events). This transformed the OpenCorporates database from a static snapshot of companies in the present, to a dynamic one that can deliver an ongoing timeline of what has changed about companies over time.

As well as enabling greater corporate accountability, this data on company changes enables organisations with KYC or other risk management obligations to keep up when the risk profile of their customers or other third parties changes.

Corporate Signals, the new name, more clearly reflects the value that the data offers for our users and for society – providing signals that changes have occurred which could indicate risk or opportunity if investigated further.

So what’s new?

Since we last wrote about it, our data and technology teams have been working to enable you to access even more information about company changes.

Key highlights include:

• Size & breadth
  Over 477 million Corporate Signals from company activity around the world are now in our database, compared with 420 million in June last year.
  
  
• Updates
  An average of 9 million Corporate Signals are typically added to our database every month. To get a sense of scale, that’s roughly the same number as the entire population of Austria!
  
  
• Leveraging the data at scale
  We are already in discussions with our commercial users about how they can leverage the data, in bulk and via our API.

Going from ‘stale’ to ‘fresh’ KYC

To illustrate the role of Corporate Signals in risk management, let’s look at KYC due diligence. Many commercial organisations look to OpenCorporates’ data as part of their due diligence process, to help verify the identity of their prospective customers.

Corporate Signals helps turn the traditional paradigm of stale KYC on its head, allowing entities with KYC obligations to spot changes in their existing clientbase earlier and identify on an ongoing basis potential red flags that warrant further investigation.

Whilst Corporate Signals tracks 8 different types of company changes (you can find the full list here), let’s look at how just a few can help drive these kinds of risk management decisions in a more proactive and timely way:

• Addition or removal of a company officer
  When an officer is added or removed, this is potentially a sign that the direction of the company has changed. This is something any organisation’s stakeholders need to know about, from clients to employees. Being alerted to these changes can also help due diligence researchers verify the identity of the new officer sooner, and ascertain if they are linked to any sanctions, political exposure or other kinds of integrity risks.
  
  
• Change of company status
  When a third party changes its status, it’s worth looking into why, and seeing if they are conducting any activity that seems out of kilter with their new status. For example: has a company’s status changed to ‘inactive’, but it somehow still shows signs of life – such as making payments?
  
  
• Gazette notice
  These notices can provide key warning signs about the financial health and management of a company. For example, we wrote last year about how the board of directors of Patisserie Holdings PLC (the parent company behind Patisserie Valerie) had apparently only become aware retrospectively that its principal trading subsidiary Stonebeach Limited was subject to a Petition to Wind Up from HMRC (to the value of £1.14m). This was despite the information already being available in our database for some time.

Stay tuned!

Having all this data presents us with an opportunity to tell some compelling visual stories about the lifecycle of companies. Stay tuned as we publish these over the coming weeks.

Want to find out more?

• Website
  Corporate Signals data is available open on our website. You’ll find it in company record pages.
  Search for a company >
  
  
• Corporate Signals at scale
  Need to drive risk management processes using data about company changes? Find out about accessing Corporate Signals via our API or as bulk data.
  Find out more >