Posted: 27 May 2022 5 min. read

KYC in energy trading and supply organisations

Last year we posted about the challenges of Know Your Customer (“KYC”) compliance for energy trading and supply organisations.

In this blog we reflect on our experiences working with trading organisations on compliance matters and our recent Roundtable with senior representatives from the sector to provide updated insights on where challenges remain, what concerns and opportunities have come to the fore over the past year and relevant KYC technology solutions. 

Regulatory expectation

In our last article on KYC compliance we highlighted that trading organisations often operate globally and are subject to numerous and varied legal and regulatory requirements. In addition, their business can be split across regulated and non-regulated activity.  Both of these features mean that applying standards consistently and globally can be challenging. Moreover, KYC regulation and guidance can fail to sufficiently consider the nuances of trading relationships which creates difficulties in their practical application.

In recent months, environmental, social and governance (“ESG”) issues have become increasingly prominent as both a regulatory and public concern. Trading and supply organisations are particularly exposed to and associated with certain ESG risks and issues such as climate change and modern slavery. However, robust KYC processes can serve as an effective means to help address these risks (e.g., through more extensive screening processes). In light of this, organisations may wish to re-evaluate their risk appetite statements, assessments and KYC controls to ensure consideration is given to a wider range of operational and compliance risks.

Process and data

Given ever-increasing regulations and expectations around financial crime compliance, organisations must continually monitor their KYC programmes to make sure they remain effective. Despite following well-established measures, including the three lines of defence model, we have seen that monitoring programme effectiveness continues to be hindered by a lack of a single source of data across compliance, operating, monitoring and trading systems. For example, a Compliance function may maintain data on the trading restrictions in place for counterparties due to a sanctions nexus; however, if this information is not shared within the company’s trading systems, then the first line of the organisation remains unaware of, and potentially exposed to, these risks. Accurate and up to date data being available to all relevant parties across the lines of defence is critical to an effective programme.

People and culture

Historically, the energy and commodities trading sector has not received the level of penalties for non-compliance which have served as an impetus for change in financial institutions. However, the UK Financial Conduct Authority (“FCA”) has increased their scrutiny on trading activities with a number of recent fines[1] and some organisations are seeing a change in attitudes with growing internal and external pressure to play a part in combatting illicit activity. In addition, the perception of KYC as a box ticking exercise has further receded as the commercial advantages of ‘knowing your counterparty’ are becoming more appreciated.

Among counterparties, too, there has been a positive uptick in providing information and an increased desire for transparency, with organisations witnessing the rise of ‘reverse KYC’.


The pandemic has accelerated the development of technology to aid KYC processes. Making use of such technology to, for example, digitise front end data or provide digital identity services, may result in more streamlined compliance functions, and allow resource to be redirected to more analytical functions rather than manual processes.

Digitising and automating processes is also expected to drive a move away from periodic review cycles to ‘perpetual KYC’ – the proactive maintenance of counterparty KYC information and ongoing monitoring to support more dynamic risk assessments. Perpetual KYC is enabled through utilising real-time data from trusted sources which feed directly into a company’s operating systems. As demand increases in this area, we may see increased collaboration between the public and private sector to enable the collection of counterparty data from public sources of information.


Every quarter Deloitte hosts a Roundtable on financial crime topics which are relevant to the energy and commodities trading sector; our most recent sessions have covered KYC and the impact of financial sanctions. To be added to the invite list for such events, or if you would like to discuss anything above in more detail, please contact Katie Jackson, Stacey Toder Feldman, or Rawad Halawi.

Key Contacts

Stacey Toder Feldman

Stacey Toder Feldman

UK Mining & Metals Leader | EMEA Forensic ER&I Lead

An international lawyer by background, Stacey Toder Feldman leads our Forensic practice for the Energy, Resources and Industrials industry across EMEA and is also the UK Mining & Metals Sector Lead. Stacey has over 20 years’ experience advising clients on all aspects of the economic crime compliance lifecycle, in particular on global export controls, trade and economic sanctions, customs fraud, anti-bribery and corruption, fraud and related workplace misconduct. She provides a range of advisory and reactive services including: complex, multi-jurisdictional investigations; regulatory driven enquiries and related settlement agreements; risk assessments; target operating model design; gap analyses; forensic SME audit support; M&A due diligence; internal investigations and workplace misconduct matters; voluntary self-disclosures and related corrective actions. Stacey also specialises in designing bespoke global outsourced and co-sourced managed investigations services. Stacey works with clients from a wide range of industries, with a particular focus on energy, resources and industrials, and especially mining and metals, oil and gas, chemicals, manufacturing, trading, shipping, and industrial products. Stacey co-leads our firm’s critical minerals strategy campaign and recently authored an article series looking at the supply chain challenges of critical minerals. A strong supporter of the diversity agenda and promoting inclusion in the workplace, Stacey is co-partner sponsor for Deloitte’s Gender Balance Network and supports a range of people and purpose-related initiatives across the firm.

Katie Jackson

Katie Jackson


Katie is the Partner in charge of Deloitte’s UK Forensic practice. With over 23 years’ experience working in the Financial Services industry and more recently in the energy and commodities trading sector, Katie has significant experience in Financial Crime, regulatory investigations, and transformation programmes. Katie sits on the firm’s FS Women in Leadership Council and is passionate about supporting diversity and inclusion at work and was a previous winner of the UK Timewise Power Part-Time list in 2014.

Rawad Halawi

Rawad Halawi

Partner, Financial Advisory

Rawad is a Partner with Deloitte UK Financial Crime practice specialised in leading financial crime change and transformation programmes and solutions in the regulated sector, with particular focus on capital markets, commodities and energy trading. Specialism in Financial Crime (FC), Anti-Money Laundering (AML), Counter-Terrorist Financing (CTF) and Sanctions. Experience across Governance, Policy, Process, Operating Model Design/Delivery, Change Management, Digital Transformation and Automation. Strong combination of change management and technical experience across Financial Crime disciplines. Excellent track record in leading and delivering major complex Financial Crime Change Programmes Solid international network in Financial Crime Strong track record of operating independently and being successful and credible at senior management level Proven ability to lead large teams and a role model for talent Strong track record in risk management and ensuring high quality of delivery