Banks and financial institutions worldwide, facing ever-stricter know-your-customer rules, are forming collective background-checking groups to pool information and try to curb fast-rising compliance costs. That was the finding of a Financial Times piece in September, which noted the strain that banks’ KYC procedures are placing on their relationships with new and existing customers. “Financial institutions are exploring ways to collate data more efficiently,” the FT reported. “One idea is to create a central database that contains certain customer information, on which banks can draw to help their due diligence.” The newspaper said that “a number of companies overseeing databases are vying for them to become dominant in order to attract more banks.” One such effort is kyc.com, launched by financial firms Markit and Genpact, which counts Citi, HSBC, UBS and others as banking “partners.” The FT quoted Anna Marrs, chief executive of commercial and private banking at Standard Chartered, as saying that such a collective database would be “a big opportunity.” But it cited her reservations, too: “A key aspect is, Do you rely on third-party data? There are aspects of customer due diligence, such as explaining where someone’s money has come from, that are hard to systematize.”