AML Name Screening

A customer’s name can look ordinary but it may still trigger an important compliance check. AML Name screening is the process of comparing a person’s or organisation’s name against relevant risk databases to identify potential connections to financial crime or regulatory risks.

A match does not automatically mean that the customer is a risk. Two people can share the same name while the spelling of one person’s name may appear differently across databases and countries. AML Name screening therefore needs to look beyond an exact name match and consider other available information before an alert is treated as a genuine match.

What Is AML Name Screening?

AML Name screening helps businesses check whether a customer, company or other relevant party may appear in records associated with financial or regulatory risk.

Depending on the screening requirements, these checks can include:

• Sanctions lists
• Politically Exposed Persons (PEPs)
• Regulatory watchlists
• Adverse media

AML Name screening is commonly used during customer onboarding and can also be repeated when relevant risk information changes.

How Does AML Name Screening Work?

The process starts with information collected about a customer or business, usually their name and where available, additional identifiers such as date of birth, nationality, address or identification number.

The screening system compares this information against relevant records and looks for potential matches. It may account for:

• Different spellings
• Aliases and former names
• Name order
• Transliteration between writing systems
• Minor character differences

Additional identifiers can then help determine whether the customer is actually the person or entity listed in the record. The FCA recommends considering information such as name, date of birth, address and other customer data when assessing potential sanctions matches.

What Does AML Name Screening Check?

AML Name screening can cover several types of risk information.

Sanctions Screening

Sanctions screening software checks whether a person or organisation appears on applicable sanctions lists. These lists can include individuals, companies, organisations and other designated parties.

The US Office of Foreign Assets Control (OFAC) maintains sanctions-related information and explains how businesses can use its lists when screening customers and other parties.

PEP Screening

PEP screening identifies people who hold or have held prominent public functions.

Being a PEP does not mean that someone has committed a crime. It indicates that the person may require additional measures because their position can create higher exposure to corruption or bribery risks. FATF recommends applying appropriate additional measures to relationships involving foreign and in certain circumstances, domestic PEPs and their family members and close associates.

Adverse Media and Watchlists

Businesses may also screen names against adverse media and other watchlists to identify information that could be relevant to a customer’s financial crime risk.

Why Do AML Name Screening Systems Produce False Positives?

Names are not unique identifiers. An aml screening system may therefore flag a legitimate customer simply because their name resembles that of someone appearing on a sanctions list or other risk database.

The FCA has highlighted the importance of appropriately calibrated screening systems, noting that poorly configured systems can generate excessive false positives while insufficiently sensitive systems can miss relevant matches.

How Do Name Variations Affect Screening?

Names can appear differently depending on language, country or how information was entered into a database.

Common variations include:

• Different spellings
• Reversed name order
• Accents and diacritics
• Abbreviations
• Aliases
• Transliteration

For example, an Arabic, Russian, Chinese or cyrillic based name can have several valid spellings when written in Latin characters. An exact-match system could miss a relevant record simply because the characters are different.

Fuzzy matching and phonetic matching can help identify potential matches even when names are not identical. The FCA recognises fuzzy matching as one approach for identifying variations in names and other customer information.

Name Screening in AML Compliance

AML Name screening is an important part of customer and entity screening, particularly when a business needs to identify potential sanctions or PEP exposure.

It should not, however, be treated as a one-time exercise. Sanctions lists and other risk information can change, meaning businesses may need to screen customers again when relevant updates occur. The FCA highlighted the importance of keeping screening systems and data up to date.

Shufti’s AML Screening software uses names and additional customer information to screen against sanctions, PEP, watchlist and adverse media data. Its matching process accounts for variations such as aliases, transliteration and phonetic similarities to help identify and assess potential matches.