Challenges and trends in identity matching
Today we have come to accept the fact that our identity is checked for nearly every transaction we make. Among the checks performed by banks, shops, customs and airports, etc. a large number of them involve checking names against lists of sanctioned entities or high-risk persons.
With regulations becoming increasingly strict, name screening has to be conducted in a growing number of sectors and against a growing number of lists. In the nineties, when electronic name screening was introduced (mainly for the purpose of enforcing the embargo on Cuba or blocking transactions for drug traffickers) the sanction lists barely contained a few hundred names. Following the terror attacks that marked the dawn of the 21st century, sanction programmes were boosted to detect terror funding and money laundering. As a result, there are now hundreds of lists worldwide, totalling millions of names, from ‘political persons’ to ‘state-owned companies’ to ‘dual-use materials’. The sanctions on Libya during the Arab Spring, on certain African leaders, and more recently on Russia, clearly demonstrate that sanction programs now form an integral part of governments’ foreign policies, replacing military action wherever possible. Within the current world context, it is clear that this trend will continue and probably accelerate in the future.
With regard to the practical implementation of sanctions, banks are de facto gatekeepers of the financial system. As such, they have been enrolled by authorities for their essential role in checking identities, either at account opening or when transactions are made. More recently, large corporates have understood that, even if they could delegate the screening of their relationships to the banks, their reputation is probably worth implementing their own preventive checks.
Inside magazine issue 6, October 2014
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