Effective Know Your Business (KYB) and Know Your Customer (KYC) programs should use data that returns high match rates — Financial Institutions (FIs) must be confident that they know the identity of their business partners. Skilled data professionals accomplish this by combining multiple data sources with robust entity resolution processes for accurate verification.

However, there is one compliance process where FIs should expect low match rates: checking existing clients against sanctions lists to identify links with money laundering, corruption, terrorism, or other illicit activities. 

A low match rate suggests that KYB and KYC workflows have identified risky clients before they have created problems for FIs. 

On the other hand, a check for sanctions could return low match rates if a company is “drifting into failure.” The term, popularized by Professor Sidney Dekker, describes how organizations are more likely to make mistakes when they are doing well. 

A low match rate could mistakenly be attributed to effective compliance processes when the real reason is outdated information. FIs might fail to notice that important facts about a client have changed. 

The costs of compliance are continuing to increase for FIs. This creates a challenge for compliance teams and the data professionals that support them. How can they implement efficient processes, and continuously monitor changes in client status, without adding unnecessary costs? 

The Benefits of External Data and Automation 

Companies can manage their compliance costs by leveraging external data, and the Demyst platform provides substantial opportunities for reducing expenses with the automation of compliance processes such as KYB, KYC, and transaction monitoring. 

By partnering with a firm that specializes in external data, FIs can source relevant information that is continuously updated to combat data decay. Working with data sources that are rigorously checked and vetted is a way to avoid drifting into disaster. 

Demyst’s experience with external data can help clients rapidly draw on multiple sources of data more efficiently. Working with Demyst can also streamline the onboarding of new data providers and avoid the invoicing complexities involved in maintaining individual relationships with multiple data vendors.

Find out how business workflows can be improved with an API that provides real-time access to hundreds of data partners. Create an account on the Demyst platform and learn more about our recipes for compliance processes, which include a solution for business watchlist and fraud screening.