A screening process depends on three key components: screening engine, customer data, and watchlist data to screen against. However, not enough attention is paid to the quality of customer data being used. Poor quality of customer data presents a significant challenge because it results in high levels of false positives during the screening process. This in turn increases costs and time spent on resolving the caseload, and can also result in mistakes during the investigations, leading to the potential for regulatory penalties. To address this, financial firms are now using master data management (MDM) to create a single customer view that can dramatically improve screening outcomes. 

Obtaining a single customer view 

Many financial services firms – particularly those which are large, or which have a long history, lack a single customer view. Legacy financial technology and a variety of different software solutions that hold and use customer data across the enterprise can mean that customer data is often siloed by business lines or IT systems. As a result, continuous monitoring solutions can end up screening the same customer multiple times, with significant data differences between profiles of the same customer.  

In an organisation, for example, continuous monitoring could end up processing 10 million customer profiles when there are only six million customers resulting in increased costs. It can also result in the same customer having different screening outcomes because of inconsistent data, resulting in more false positives, or missed opportunities to identify criminal behaviour. In addition, screening results could differ across types of screening, with inconsistent outcomes between a transaction screening system and a customer onboarding screening system due to inconsistent customer profile data. 

This situation can also result in a lack of insight into aggregated ownership. For example, a non-sanctioned entity should technically be considered sanctioned if a sanctioned entity or individual has more than 50% ownership in it. However, the regulatory data is often not complete in this regard and does not include aggregated ownership information. Lacking a single customer view might mean that the information a business entity has about aggregated ownership is not shared across the enterprise. Watchlist data that includes aggregated ownership information is often not shared across the enterprise effectively.  

Delivering better monitoring 

Creating a single customer view through master data management can dramatically improve screening outcomes. According to Gartner, master data management “is a technology-enabled discipline in which business and IT work together to ensure the uniformity, accuracy, stewardship, semantic consistency and accountability of the enterprise’s official shared master data assets. Master data is the consistent and uniform set of identifiers and extended attributes that describes the core entities of the enterprise including customers, prospects, citizens, suppliers, sites, hierarchies, and chart of accounts.” 

So, for example, a large bank can use master data management to bring all its customer data together into a single view – enabling the entire business to get insights into aggregated information. The customer data then needs to be aligned. Individual teams with different data sets need to agree on what the most accurate data is for an individual customer. For example, if five systems have a customer’s birthday as 4 May 1975 and the sixth one has it as 5 May 1974, the business must determine which date is correct. This can be the most challenging aspect of a master data management project, but the benefits are substantial. 

Once the single customer view is created with the correct data, multiple profiles of a customer are now condensed into just one and the customer’s risk profile can be associated with only that view – so that the organisation now truly knows its customer. This single customer view profile is now the only information that needs to be screened each time by monitoring software. 

This single customer profile created through master data management also enables screening to happen immediately, rather than at the end of the day. For example, if a customer changes their address or other details about themselves, this could potentially trigger a sanctions screening process against them. With a single customer view, it’s possible to run that screening process immediately – without it, the screening process would likely have to be run at the end of the day. The result is that the firm always knows its risk exposure to each customer.   

Implementing master data management 

Facctum helps firms create a single customer view for their enterprise-wide usage including financial crime compliance processes using master data management. With advanced technology and extensive expertise, Facctum efficiently implements master data management. 

By consolidating scattered customer data repositories across the enterprise, Facctum can help create a single customer view to significantly reduce screening resources, minimise false positives, and enhance operational and compliance risk management.  

To find out how Facctum can help you in creating a single customer view, write to us at sales@facctum.com.