Name Matching & Revision (Part 2)
In the first part, we characterized the name matching problem. In this second part, we will discuss false negatives. According to article 13 of AMLO-FINMA, financial intermediaries must develop criteria to identify higher-risk business relationships. The dispatch regarding the revised AMLA mentions that the risk-based approach is systematically anchored in the FATF standards. Legislators therefore correctly assume that a certain latitude is available when it comes to recognizing risky customer relationships. In this gray zone, there’s no such thing as a 100% perfect decision. Nevertheless, it is necessary for the risk of false negatives to be kept as small as possible.
False negatives
Possible causes of false negatives include:
- Differing interpretation of PEPs
- Name variants not recognized by the match profile
- Missing profiles
- Profiles with insufficient information
- Too many hits that cannot be verified with the available resources
- Incorrect text encoding
- Form of address and/or academic title in name (Dr. Peter Example)
- Incorrect data capture (e.g. Verena or Hans as first names)
- Communities of heirs as natural persons
- Nicknames in place of official first names (e.g. Bill instead of William, Fritz instead of Friedrich)
