Danske Bank A/S, DNB Bank ASA, Nordea Bank Abp, Skandinaviska Enskilda Banken AB, Svenska Handelsbanken AB and Swedbank AB have set up a joint venture company to develop a platform for handling something that they call 'KYC (know-your-customer) data.'

The joint venture company has not built the platform yet but hopes to unveil it for use in 2020. The company is autonomous – i.e. run at arm's length from its parent banks – and will initially offer KYC services to large and medium-sized Scandinavian companies that have to obey the region's anti-money-laundering laws.

In a rather incoherent joint press release, the six banks said last week that they had "received the green light from the European Commission," the nearest thing that the European Union has to an executive branch. The idea that companies that embark on joint ventures might need the permission of such a body seemed peculiar to Compliance Matters, which on Friday asked Fredrik Millde, the joint venture company's temporary CEO, why he had sought it. He said the following.

"We didn't need permission really. They don't need to apply. We've found that to be a sensible way to do this process because we would otherwise be obliged to file in several different jurisdictions. There is nothing wrong with filing in several different jurisdictions but we thought it would be a more efficient way of filing."

The press release also said that the commission's approval came "in accordance with the EU merger control rules." Compliance Matters asked Millde who was merging with whom, but did not receive an entirely clear answer.

"It's a joint venture, so for competitive reasons we have applied. To get the commission's permission it needn't be cross-border. We've done it under EU competition law. It's a merger filing. If one bank has a majority share, that is worth something."

No bank, in fact, has a majority stake. The press release says that the six banks will invest equal shares in the company. As it puts this in the future tense, Compliance Matters asked whether the joint venture company had actually been formed or not. Millde said: "yes it has, that's just the way they wrote it."

When Compliance Matters suggested to Millde that "KYC data" could mean practically anything, he replied: "It could be a lot of things. It refers to what we have defined as a KYC standard. The company formed today will provide information for KYC purposes. The standard is written down when it comes to data points. This service will be available for everyone."

He declined to let Compliance Matters read the standard, adding: "They've finished the first version of the standard. It's a bit of a secret."

He added: "The six banks won't run the platform, the company will. The service will cater for banks and other regulated entities – money service businesses, high-value goods dealers, it could be for real-estate brokers...lots of non-banks. It will serve the whole market that requires KYC. The pricing and access will be transparent. They will log onto a platform and it will give them information."

The 'platform' appears to be a database of open-source adverse publicity about individuals and firms that reporting entities might want to interrogate when checking the backgrounds (and foregrounds) of applicants for business. The joint venture plans to sell the platform’s services to the regulated community. Compliance Matters tried to ascertain the sources of information from which the platform was going to draw and whether the company was going to use the usual global market leaders (World-Check, Factiva, Acuris etc) to gather such information.

"I will not answer the question on what data providers we will use. We will purchase data and we will obtain our own from open sources.

"The other part of this is that the corporates (i.e. the customers of the banks [that pay to use the platform] or other legally obliged entities) will also provide information on a standard form. There will be a new contract that will go round and they will have to sign it. The banks will outsource the collection and processing of data - they can use any outsourcing partners they like, but the platform itself is set up to act as an outsourcing partner, but they don't have to use it. The contract lets the platform process their data. The platform is not built yet."

Compliance Matters asked what the company was doing to gather usable information for inclusion in the database. Millde said: "We'll be capturing identifying data but also validating it. Part of the validation will be manual. The number of people employed depends on the level of interest we get. We are starting to recruit at the end of the summer. Now we have 20 people. It's not a small venture."

The hyperbolic press release says "the collaboration between all banks has been both effective and successful," but Millde reassured Compliance Matters that this was merely a reference to the banks managing to put pen to paper and write down the first draft of their secret standard.

The press release refers to the standard as a "utility standard for compliant KYC information" and calls the company "a utility." Compliance Matters asked why the word "utility" was being bandied about and Millde replied: "I don't know why. The working name of this company is Nordic KYC Utility."

The joint venture appears to be a genuine attempt on the part of Scandinavian banks to atone for the money-laundering scandals that have swept the region in the last year.