But this can all be avoided by using an AI-powered name screening tool such as Screena. And these needs go beyond financial institutions, evidenced by the growing number of businesses that have had unfriendly dealings with the US Treasury Office.
The Most Affected Industries
Banking happens to be the industry most affected by name screening and identity risk. In 2019, banks were the major recipients of hefty penalties for breaching sanctions set by the US Treasury Office of Foreign Assets Control (OFAC), with fines levied totaling over US$1.2 billion.
Besides banks, there were 18 non-banking companies and organizations penalized to the tune of $16.5 million for breaching sanction regulations in that same year. These organizations included businesses in diverse industries such as travel, insurance, oil services, manufacturing, automobile, leisure, and health sectors.
One notable incident where software failure led to heavy penalties and sanctions is the case of the Habib Bank Ltd (HBL). The New York branch of HBL paid a massive penalty of 225M USD (down from an initial fine of 630M USD) for violations of sanctions applied by the US authorities.
The case is a good example of how companies and organizations can easily be penalized for breaching sanctions even when the illegal transaction resulted from an unintentional flaw in their screening software.
Another case on a smaller scale also affected a Pakistani Bank (National Bank of Pakistan or NBP). Their screening software failed to recognize that the name of their account holder LC Air Company Kyrgyztransavia belonged to Kyrgyz Trans Avia, the latter having been blacklisted by OFAC in May 2013 for allegedly assisting Iran in chartering an aircraft for transporting illicit cargo to Syria for use by the Assad government’s crackdown on its citizens.
NBP was only fined $28,800 as a result of the failure in their screening software, but it could have been worse. With the increased complexity of sanctions, heavy fines, and the rising number of entities getting blacklisted by authorities, it is now more important than ever to ensure that your business or organization uses the best AI-powered screening software to avoid fraud and sanctions.
Poor or inefficient technology can easily result in flaws and failure to comply with the prescribed sanctions.
What to Look for in the Best Name Screening Software
One of the key factors to consider in name screening solutions are their adaptability. In the case of Screena, we not only provide an AI-powered name screening solution that can easily be integrated through an original algorithm-as-a-service approach, but we have also made it so flexible that it can be fully customized from your side to meet your unique needs and requirements, anywhere, anytime, anyhow.
Designed for extreme scalability, it comes with self-adaptive, context-based algorithms, and an arsenal of configurable options to provide you with the most accurate and reliable identity verification solution.
In any solution, you will be looking for filters you can adapt to your business, adjust the similarity threshold parameters, and get the most relevant match scores. Beyond fine-tuning the algorithm’s accuracy, you must be able to use option-based capabilities for different name entities such as individuals, organizations and vessels, manage typical typos and misspellings, and create your library of synonyms, stop words, numerals, suffixes, and prefixes, and all types of titles and honorifics. You’ll want to be able to do this in any language and writing system, and get automatic transliterations. If you are a Screena Firm subscriber, you can do all this and also calibrate the AI models to suit your own unique data typology, in terms of cultures and linguistic groups.
As a world-class name check AI tool, Screena can constantly be updated to cover international as well as local watchlists and law enforcement lists. It supports name variations and alternative spellings in different languages and writing scripts. The tool is designed to boost operational efficiency by weeding out False Positives through high-performing pre-trained machine learning models that automatically adapt to the type of data being screened.
In a nutshell, we specialize in enhancing your financial crime compliance and risk management capabilities to keep your organization protected against all types of threats – sanctions and criminals.