Challenger banks bring payments into perspective

Shared KYC database - very dangerous to the system but very good for new entrants. Little players should have the same risks and responsibilities as big players in this area; otherwise they can become a soft point-of-entry. Once a rogue person or entity has been established falsely in such a database, you have a mole inside the system that can burrow freely and in any direction. How could it be ensured that KYC data was regularly refreshed? From which Trusted Third Parties would it derive its data and who decides whether the processes of those TTPs are watertight? Who would carry the legal liability for a failure and pay the heavy financial penalty (and that is the key to making sure the work is done properly)? And who would run it? I think we can see who is putting themselves up for that role.

@Anonymous - the bank that owns the customer owns the legal liability; it can outsource processing but not liability (although it could choose to mitigate some of that risk contractually).  But you are right that these are some of the central issues to explore.

In terms of who would run such a database, there are already organisations out there - SWIFT has signed up Barclays, Deutsche Bank, Erste Group Bank, HSBC, ING and Raiffeisen Bank International to its KYC Registry, and Thomson Reuters recently launched Accelus Org ID to act as a neutral 'central clearing house' for identity credentials. 

So the ball is already rolling.  The key is to define what should be collaborative and what should be competitive between banks.

A utility can often provide a better quality service. The current baseline of an old gas bill and a copy of a passport (rarely verified; nor re-verified at appropriate intervals) is far from 'strong' KYC. A utility might deploy identity verification technology already in wide use; retina scans at airports, fingerprints http://www.bbc.co.uk/news/world-africa-28970411, palm scans...is that competitive or collaborative space?

A scheme based approach where particpating banks (and by extension their Customers) know and understand and sign up to the liabilities and entitlements, the rights and obligations of all parties- is why IdenTrusts Trust Network was established (as a distributed liability model).  These aspects are defined thru 4 specific but interlinked dimensions, namely Policy Legal Operation and Technical- so that complete Business interoperability and associated liability is established upfront... not in hindsight....or after the the cat is out of the bag (or the mole is already burrowing...!) 

There can be no radical overhaul of UK payments and methods - or challengers in retail banking or to the card schemes until the Payments Council and/or Payments System Regulator (A new regulatory framework for payment systems in the UK PSR CP14/1) MANDATE a centralized UK KYC identity.

How this is best achieved is beyond the scope of this thread -

Nothwithstanding it is the vital 'cornerstone' in enablement of rapid market changes in terms of both infrastructure and new schemes and products which are badly needed in the UK payments space.

Establishment of centralized KYC will revolutionize payments - methods - schemes and products.

2015 ?

a centralised KYC utility might also serve to fill a gap in the taxonomy of a maturing virtual currency services