Twenty of the world's largest banks are collaborating on a
central credit database to reduce fraud.
The database, called the Global Regulatory Information Database
(Grid), is being operated by Regulatory DataCorp International, an
organisation set up in 2002 by 20 global banks, it was announced
last week.
Participating banks include Goldman Sachs, American Express, Credit
Suisse First Boston, JPMorgan Chase & Co, Deutsche Bank and
Merrill Lynch. Through Grid, the participating banks will be able
to run global background checks on customers.
According to RDC, the Grid will hold information from about 1.5
million individual and business names drawn from over 22,000
international and US public record sources, including government
lists, media and regulatory actions.
James Mintz Group, a New York-based company that specialises in
gathering international security data, will be providing the RDC
with access to regulatory agencies in more than 50 countries.
The database will be used by banks to comply with anti-terrorism
and anti-money-laundering regulations under the US Patriot Act.
According to a report in March this year from analyst company
TowerGroup, US brokerages will spend £441m by 2005 on technology
and outsourcing services to comply with the US anti-terrorism
regulations.
TowerGroup estimated that 39% of this expenditure would be spent on
integrating back-end systems, and 35% would be spent on new
software.