Need to Know Your Customer (KYC)? Identity Resolution Can Help

The Challenges of Know Your Customer

Know Your Customer (KYC) is an increasingly important requirement for financial and other institutions.  KYC includes the screening of prospective and current customers against sanctions lists such as those maintained by the European Union, the UN Security Council, or the US Treasury Department’s Office of Foreign Assets Control (OFAC).  Individuals and companies on those lists are typically associated with target countries and regimes, terrorists, international drug traffickers, or are engaged in the proliferation of weapons of mass destruction.  Failing to meet KYC requirements could subject an institution to substantial fines.

Screening prospective and current customers against sanction lists is not an easy task.  Records may differ due to:

• Misspellings
• Word order variations (Park Sol Mi – Sol Mi Park)
• Initials (John Benjamin Robinson – B. Robinson)
• Abbreviations (Avenue – /Ave)
• Nicknames (Edward – Ted/Teddy)

The records can also be in English or other languages and language scripts resulting in differences in records caused by transliteration variations (Abdel Fattah el-Sisi – Abdul Fatah al-Sisi).  The record fields may also contain data other than names: dates, addresses, and a variety of numeric values, all of which need to be accurately matched.

Modern matching techniques have to be robust in the face of all these potential record discrepancies, not only individually, but in combination, must scale to meet today’s Big Data-sized challenges, and support real-time screening.

How Identity Resolution Meets the Challenge

Identity Resolution is a critical technology to support KYC.  Here are some crucial features of an effective and accurate Identity Resolution tool:

1. High accuracy.  Effective Identity Resolution requires that the matching be highly accurate, minimizing false positives and false negatives.  Critical to this is the incorporation of techniques for handling the differing characteristics of names from all over the world.
2. Scalable and real-time.  Identity Resolution must be engineered to support scalable, real-time  matching of potential customer records against sanctions lists.
3. Tunable. An Identity Resolution product must allow the application of specific business rules to determine what combination of record attributes should be matched and how important each attribute is to the overall matching score.

NetOwl’s Identity Resolution product is the kind of product that can provide financial firms, investment companies, money transfer businesses, and others, with the advanced Identity Resolution capabilities required to ensure compliance with Know Your Customer regulations.