City asset managers push for an industry-wide KYC utility as Rathbones client onboarding failings expose systemic weakness in current verification processes

A widely-reported operational failure at Rathbones, a listed UK wealth manager, has reignited debate among City asset managers about the viability of a shared industry utility for KYC (know your customer) checks, the identity verification and anti-money-laundering due diligence that firms must carry out on clients under financial crime rules. The 'Rathbones fiasco', as Financial News London characterises it, has prompted senior voices in the asset management sector to revisit a long-discussed but never-implemented concept: a centralised infrastructure that multiple firms could plug into rather than each running duplicative, firm-by-firm onboarding processes. The argument for a utility model is efficiency and consistency, since a client verified once to a shared standard would not need to be re-verified every time they open a relationship with a new firm. The argument against has historically centred on competitive concerns, data governance, and the difficulty of agreeing a common standard across a fragmented industry. For UK financial services lawyers, the regulatory backdrop is the FCA's continued emphasis on financial crime prevention and the expectation that firms maintain robust and proportionate client verification processes. Any industry utility would require careful structuring to ensure that participating firms remain individually responsible for their regulatory obligations, and that shared data infrastructure does not create systemic vulnerability or data protection risk. No specific proposals or regulatory endorsement of a utility model were reported in the sources.