Introduction to Banking Act 24c Account Reporting

The German Credit Banking Act (KWG) and additional regulations impose restrictions on financial institutions to limit the banks options to incur risks. A regulation of section 24c KWG specifies that financial institutions must maintain a file to immediately store account related data, when an account (that is subject to eligibility checks as per Section 154 (2) sentence 1 of the German Fiscal Code) or custodial account is opened or changed. The following events are relevant:

• Account creation
• Account modification
• Account closure
• Customer modification

The financial institution must ensure that the BaFin (German Federal Financial Supervisory Authority) can retrieve the data from the file using a procedure chosen by the BaFin at any time, in an automated manner and without notifying the financial institution. This must be ensured through technical and organizational means.

Due to the high-level requirements with regard to availability, data protection, access times and reliability, many financial institutions have decided to use an external service provider as data centre for account enquiry. According to that, a component has been developed for the data exchange between Temenos Transact and a service provider.

This component includes an application for the monitoring and exchange of the required accounts data and an interface to the service provider. Currently, the company Bank-Verlag and Fiducia are supported as service provider.

The solution provides account related data and its related persons like account holder, attorneys and beneficiary owner.

When the above mentioned operations, like account creation or customer modification are done, an event is stored which will trigger the delivering of the account data. The account data will then be summerized in the form of an XML message. The XML message generated has to be as per the XSD standards. Once the XML is received and processed by the external service provider, they will send an confirmation file with a one day gap.

This file contains the success or error code that is to be evaluate by the bank.