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Minimise False Matches

A number of settings and policies can be applied to streamline the scanning and matching process, in accordance with the appropriate AML/CTF or AML/CFT legislation, and minimise the number of false positive matches. They can be applied at organisation level, or some of them can be set as user defined and applied prior to scanning.

Please note that no recommendations are inferred by this section, it is provided solely as information to assist you with optimising your scan settings, so as to best meet your reporting requirements. Please work with your compliance/legal team to understand the impact of the scan settings and to ensure you stay within your organisation's acceptable risk appetite while continuing to meet your AML/CTF obligations

The following factors listed below affect matching and should be reviewed.

Member scan rules, settings and policies

  • Watchlist category selection (List Access)
  • Match Type
  • Close Match Rate (Close matches only)
  • Whitelist Policy
  • Country of Residence Policy
  • Default Country of Residence - set at Organisation level, cannot be User Defined
  • PEP Jurisdiction Policy
  • Ignore DOB Policy - set at Organisation level, cannot be User Defined
  • Original Script Name Search - set at Organisation level, cannot be User Defined (if Original Script Search setting is on)
  • Batch Validation - set on or off at Organisation level, cannot be User Defined

Corporate scan rules, settings and policies

  • Watchlist category selection (List Access)
  • Match Type
  • Whitelist Policy

Watchlist Category Selection (List Access)

The Compliance Officer selects, at organisation level, which watchlist categories will be scanned against. Batch Scan reports detail which watchlist categories a particular batch was scanned against.

Review List Access

personCompliance Officers can review and change the organisation watchlist settings in Administration > Organisation > List Access tab.

personAdvanced Users can only view the organisation watchlist settings.

Member Scan Lists

MemberCheck scans member records, individually or in batch files, against the following watchlist categories as selected in the organisation's Administration settings:

  • Politically Exposed Persons (PEP)

  • Relatives or Close Associates (RCA)

  • Persons of Special Interest (SIP) - sub divided into the categories of:

    CategoryDescription
    TerrorPersons involved or alleged to have been involved in criminal activity relating to terrorism, including proliferation of weapons of mass destruction, terrorist financing and support, and crimes with terrorist connections.
    Organised CrimePersons involved or alleged to have been involved in criminal activity relating to organised crime, including illicit arms trafficking, smuggling or illicit trafficking in goods, and organised crime groups, gangs and syndicates.
    Financial CrimePersons involved or alleged to have been involved in criminal activity relating to financial crime, including financial and non-financial fraud, money laundering, tax offences, embezzlement, counterfeiting of currency, high-value theft and robbery, insider trading, unexplained wealth orders / interim assets freeze, and failure to comply with relevant financial regulations.
    Narcotics CrimesPersons involved or alleged to have been involved in criminal activity relating to narcotics, including production, trafficking and distribution of drugs.
    Modern SlaveryPersons involved or alleged to have been involved in criminal activity relating to modern slavery, including human trafficking and exploitation, labour trafficking and exploitation, and sex trafficking and exploitation.
    Bribery & CorruptionPersons involved or alleged to have been involved in criminal activity relating to bribery and corruption, including being bribed, bribing another person (including facilitation payments), bribing a foreign public official, failure of a relevant commercial organisation to prevent bribery, and corrupt practices.
    Cyber CrimePersons involved or alleged to have been involved in criminal activity relating to cybercrime, including identity theft, scams, hacking, and credit card or payment fraud.
    OtherIndividuals involved with other alleged offences related to any of the above categories but without evidence of official action by relevant national or foreign authorities.
    Disqualified DirectorsIndividuals that have been disqualified as acting as company directors (for UK only).
    InsolvencyIndividuals that have been declared as bankrupt or insolvent (for UK and Ireland only).

  • Official Lists (SIP & SIE) - sub divided into the categories of:

    CategoryDescription
    Sanction ListsThese can be further sub divided into:
    • All Sanctions Lists
    • Specific Country Sanctions:
      • Australia Lists, which comprise the following:
        • DFAT (Australia) Autonomous Sanctions
        • DFAT (Australia) Consolidated Sanctions List
      • New Zealand Lists, which comprise the following:
        • New Zealand Police Designated Terrorists
    Law EnforcementPersons or entities appearing on an official law enforcement public domain site as either wanted, investigated, or arrested by an official law enforcement body or the police; or individuals or entities charged, prosecuted, convicted and/or sentenced by a competent criminal court that constitutes a criminal act.
    Regulatory EnforcementPersons or entities listed on an official regulatory enforcement public domain site against whom official regulatory administrative action has been taken by a government or independent regulatory agency responsible for the supervision and oversight of specific administrative regulations or rules for breaches of said rules and regulations.

Corporate Scan Lists

MemberCheck scans organisation/company records, individually or in batch files, against the following watchlists as selected in the organisation's Administration settings:

  • Entities of Special Interest (SIEs) - sub divided into the categories of:
    CategoryDescription
    TerrorEntities involved or alleged to have been involved in criminal activity relating to terrorism, including proliferation of weapons of mass destruction, terrorist financing and support, and crimes with terrorist connections.
    Organised CrimeEntities involved or alleged to have been involved in criminal activity relating to organised crime, including illicit arms trafficking, smuggling or illicit trafficking in goods, and organised crime groups, gangs and syndicates.
    Financial CrimeEntities involved or alleged to have been involved in criminal activity relating to financial crime, including financial and non-financial fraud, money laundering, tax offences, embezzlement, counterfeiting of currency, high-value theft and robbery, insider trading, unexplained wealth orders / interim assets freeze, and failure to comply with relevant financial regulations.
    Narcotics CrimesEntities involved or alleged to have been involved in criminal activity relating to narcotics, including production, trafficking and distribution of drugs.
    Modern SlaveryEntities involved or alleged to have been involved in criminal activity relating to modern slavery, including human trafficking and exploitation, labour trafficking and exploitation, and sex trafficking and exploitation.
    Bribery & CorruptionEntities involved or alleged to have been involved in criminal activity relating to bribery and corruption, including being bribed, bribing another person (including facilitation payments), bribing a foreign public official, failure of a relevant commercial organisation to prevent bribery, and corrupt practices.
    Cyber CrimeEntities involved or alleged to have been involved in criminal activity relating to cybercrime, including identity theft, scams, hacking, and credit card or payment fraud.
    OtherEntities involved with other alleged offences related to any of the above categories but without evidence of official action by relevant national or foreign authorities.
    Disqualified DirectorsEntities that are associated with company directors who have been disqualified or professionally suspended (for UK only).
    InsolvencyEntities that have been declared as bankrupt or insolvent (for UK and Ireland only).

Match Type

Match Type determines the degree of accuracy used for matching.

The Match Type setting is predetermined by the Compliance Officer. It can be predefined so that all users scan using the same setting or it can be set to User Defined and customised for each scan. If set to User Defined, Match Type defaults to Exact.

Member Scans

First Name and Last Name are always used when matching. Matching is not case sensitive.

The match type options are:

OptionDescription
ExactThe scan results show matches, where the First and Last Name match exactly. Middle names are also taken into account but Middle Name matching does not eliminate watchlist entities with no middle name.
Scan results include matches, where:
  • The First and Middle and Last Name match exactly.
  • The First and Last Name match exactly and the watchlist record Middle Name contains the Middle Name entered.
  • The First and Last Name match exactly and the watchlist record has no Middle Name.
CloseThe scan returns matches where the First and Last Name match using close matching phonetically based algorithms. Close matches also include a reverse name match.

Uses fuzzy logic to search specific criteria against a person.

Close matching is best suited to single scans as it always produces a great number of false matches.

The fuzzy logic matching algorithm uses similar-sounding words or names for searching.

The fuzzy logic converts an alphabetical name to a four character alphanumeric code, where the first letter of the name is converted to an alphabet and the other 3 characters are converted to numbers. Vowels in names, unless they are the first character of the name, are ignored for better fuzzy logic matching.

Additionally, Close match performs a reverse name scan - this is particularly useful for scanning names of individuals from countries where it is customary to place the Last Name (family name) before the individual's First Name (given name). Reverse name matching is exact matching and does not use fuzzy logic.

These are some examples of Close matching results:
  • John Smith can return matches against John Smith, Jon Smythe, Jan-Dirk Smit, Joanna Smit, Smith John
  • Thomas Lee can return matches against Thomas Lee, Teng Hern Lee, Tang Le, Tung Che Li, Lee Thomas
Close Match RateAn additional scan parameter is available for Close matches to allow you to refine the scan results by setting a Close Match Rate threshold.

MemberCheck analyses each Close match result and rates the closeness of the match by assigning a percentage from 1-100, with 1% being not close and 100% being very close. Entering a match rate threshold allows you to refine your Close scan match results, e.g. entering 50 will display only match results with a match rate of greater than or equal to 50%.

Close Match Rate is an option available in the Close match Scan Parameters to allow you to refine the scan results by setting a Close Match Rate threshold.

You may find that you get different results from a Close match with a threshold of 100% compared with an Exact match.

The reason for this is because Close matches include the reverse name match. For example.
  • An Exact match scan of Henry James will produce match results for Henry James only
  • A Close match scan of Henry James (match rate threshold of 100%) will produce match results for both Henry James and James Henry.

Original Script Name Matching

Original Script Name is a field used for entering the member's name in its original script (e.g. Arabic, Chinese, Cyrillic, Korean, Japanese, Thai and other non Latin / Roman scripts). During scanning, this name is matched against the Original Script Name in the watchlist record.

You can choose scanning options of scanning against First and Last Name only or Original Script Name only or both First and Last Name and Original Script Name. If you choose both scanning options, results will include Original Script Name matches, even if the First and Last Name do not match, and First and Last Name matches, even if the Original Script name does not match.

Corporate Scans

Company Name is always used when matching. The match type options are:

OptionDescription
Exact MatchThe scan results show matches, where the Company Name, excluding any suffixes, matches exactly.

For example, a search for Hunter Pty Ltd will identify matches with Hunter Pty Ltd only. Companies with names such as Hunter & Co or Hunter Corporation will not produce matches.

Close MatchThe scan returns matches where the Company Name is contained in the watchlist entity's company name field.

For example, a search for Hunter Pty Ltd will identify matches with Hunter & Smith Pty Ltd, Hunter Merckel Gmbh, Hunter Aerospace Ltd.

Date of Birth

If a valid Date of Birth is entered, matching is performed for both Exact and Close matches.

When checking Date of Birth, MemberCheck checks against all occurrences of Date of Birth in a watchlist record.

ScenarioOutcome
Date of Birth is entered and valid
(DD/MM/YYYY)		Scan Results show all Name matches with the following:
  • The exact Date of Birth
  • An incomplete Date of Birth but the same:
    • Year of Birth
    • Year and Month of Birth
    • Day and Month of Birth
    • Day and Year of Birth
  • No Date of Birth
Date of Birth is invalid or not providedDate of Birth will NOT be checked in the matching process

Gender

If a Gender is entered, matching is performed for both Exact and Close matches. When checking Gender, MemberCheck checks against all occurrences of Gender in a watchlist record.

ScenarioOutcome
Gender is entered and valid
(M, Male, F or Female)		Scan Results show all Name matches with the following:
  • Gender of Male, M or Female, F, as appropriate
  • No Gender
  • Unknown Gender
  • Unspecified Gender
Gender not provided or is invalidGender will NOT be checked in the matching process

Whitelist Policy

Objective

To eliminate match results where due diligence has shown that member and watchlist entity matches, although they have matching Names, or matching Names and Date of Birth, are not a true match

Compliance Officer predetermines the Whitelist Policy setting

personThe Whitelist Policy setting can be predefined so that all users scan using the same setting, or it can be set to User Defined and customised for each scan.

If set to User Defined, the default setting is Apply.

How is the Whitelist created? The member whitelist is a list of member and watchlist entity matches where, although they have matching Names, or matching Names and Date of Birth, due diligence has shown that they are not a true match. A due diligence decision of No Match is recorded for such matches.

The corporate whitelist is a list of companies and watchlist corporate entity matches where, although they have matching Company Names, or matching Company Names and ID Numbers, due diligence has shown that they are not a true match. A due diligence decision of No Match is recorded for such matches.

Options

The Whitelist Policy determines if the Whitelist is applied or ignored for single and batch scans.

OptionDescription
ApplyMember and watchlist entity matches or company and watchlist corporate entity matches previously classified, after due diligence, as No Match are excluded from the scan results.
IgnoreAll watchlist entities matching the scanned member or company are displayed. Previous due diligence decisions are also shown.
User DefinedThe user is presented with radio buttons to select Apply or Ignore prior to scanning.

Country of Residence Policy

Objective

To eliminate match results where the member and matching watchlist entity do not have a Country of Residence in common.

Please note that no recommendations for policy settings are inferred by this section, it is provided solely as information to assist you with optimising your scanning settings, so as to best meet your reporting requirements.

Compliance Officer predetermines the Country of Residence Policy setting

personThe Country of Residence Policy settings can be predetermined in accordance with the appropriate AML/CTF or AML/CFT legislation. They can be predefined so that all users scan using the same setting or they can be set to User Defined and customised for each scan.

If set to User Defined, the default setting is Apply to PEP.

How is Country of Residence determined?

For a member, Country of Residence is determined by the address (see Default Country of Residence). For a watchlist entity, all countries associated with the matching entity are compared, e.g. primary address, citizenship and locations.

Options

OptionDescription
Apply to AllMember and all watchlist entity matches where the member's Country of Residence is different to the found entity's Country of Residence are excluded from the scan results.
Apply to PEPMember and PEP watchlist entity matches, where the member's Country of Residence is different to the PEP's Country of Residence are excluded from the scan results.
Apply to RCAMember and RCA watchlist entity matches where the member's Country of Residence is different to the found entity's Country of Residence are excluded from the scan results.

RCA entities inherit their country of residence from the PEP to which they are related.

Apply to SIP (incl. TER)Member and SIP (incl. TER) watchlist entity matches, where the member's Country of Residence is different to the found entity's Country of Residence are excluded from the scan results.
IgnoreCountry of Residence Policy is not applied.

Default Country of Residence

person Only a Compliance Officer can set this parameter.

Objective

To assign a nominated Country of Residence to a member, when a country cannot be identified in the member’s address data, in both single and batch scans.

The Default Country of Residence setting is applicable where the Country of Residence Policy is utilised in the matching criteria.

Options

OptionDescription
Not SpecifiedNo effect on member records being scanned.
Country selectedThe selected country is assigned as the Country of Residence when no country can be identified in the address of a member record being scanned. It is not assigned if the member record contains no address data.

Location of MemberCheck Users

For MemberCheck users outside Australia, selecting a Default Country of Residence removes the need to add the country to the address of a member where a country does not already exist in the member's records.

For Australian MemberCheck users, selecting Australia as the Default Country of Residence will assign Australia as the Country of Residence to member addresses that do not contain a State, Australia or another Country.

Note

Default Country of Residence should be set once and not changed as no record is kept of changes to this setting.

PEP Jurisdiction Policy

Objective

To eliminate match results where the matching watchlist entity is a PEP whose country of Jurisdiction is selected to be excluded in the organisation's settings.

Compliance Officer predetermines the PEP Jurisdiction Policy setting

personThe PEP Jurisdiction Policy settings can be predetermined in accordance with the appropriate AML/CTF or AML/CFT legislation. They can be predefined so that all users scan using the same setting or it can be set to User Defined and customised for each scan.

If set to User Defined, the default setting is Exclude PEP matches whose country of Jurisdiction is specified.

If no country is specified, this is the equivalent of selecting Ignore the policy.

Please note that no recommendations are inferred by this section, it is provided solely as information to assist you with optimising your scanning settings, so as to best meet your reporting requirements.

How is the PEP's country identified?

The Country of Jurisdiction of PEP watchlist entities is used to identify their country.

Options

OptionDescription
Exclude PEP JurisdictionsThese are specified in the Organisation's Settings under PEP Jurisdiction Exclude.
IgnorePEP Jurisdiction is not applied.

Ignore Blank DOB

person Only a Compliance Officer can set this parameter.

Objective

To eliminate match results where either the member or the matching watchlist entity do not have a Date of Birth.

Compliance Officer predetermines the Ignore Blank DOB setting

personThe Ignore Blank DOB setting is set at organisation level and cannot be user defined prior to scanning.

Ignore Blank DOB Options

OptionDescription
Off

If no Date of Birth specified or an invalid Date of Birth is entered for the member, the Date of Birth will NOT be checked in the matching process.

If a valid Date of Birth (DD/MM/YYYY) is entered for the member, the Scan Results show all Name matches with the following:
  • The exact Date of Birth
  • An incomplete Date of Birth but the same:
    • Year of Birth
    • Year and Month of Birth
    • Day and Month of Birth
    • Day and Year of Birth
  • No Date of Birth
OnMatch results where the member or the matching watchlist entity does not have a Date of Birth are eliminated. Scan Results show all matches where both the Member and the matching entity have a Date of Birth.

Date of Birth must be entered for all scans.

Use this setting with caution

Turning this setting on may exclude a true match from your scan results.

person Only a Compliance Officer can set this parameter.

Objective

To allow a person's name in its original script (e.g. Cyrillic, Arabic and other non Latin / Roman languages) to be scanned.

Compliance Officer predetermines the Original Script Search setting

personThe Original Script Search setting is set at organisation level and cannot be user defined prior to scanning.

Original Script Search Options

OptionDescription
OffExact or Close matching is performed on First, Middle, Last Name according to the Match Type option selected.
OnYou can choose to scan against First, Middle, Last Name only or Original Script Name only or both First, Middle, Last Name and Original Script Name.

If you choose both scanning options, results will include Original Script name matches, even if the First, Middle, Last Name do not match, and First, Middle, Last Name matches, even if the Original Script name does not match.

Exact or Close matching is performed on First, Middle, Last Name according to the Match Type option selected and Exact matching is performed on Original Script Name.

Batch Validation

person Only a Compliance Officer can set this parameter.

Objective

To allow batch validation to be turned off so that batch files containing incorrect formatting or invalid data can be accepted and scanned by ignoring the records with incorrect formatting or invalid data.

Batch Validation Options

OptionDescription
OffIf not all records in the batch file have incorrect formatting or contain invalid data, the batch file will be accepted and the batch scan will be completed by ignoring the incorrectly formatted or invalid data.

Completed with errors will be displayed in the Batch Scan History Status column.

The word errors will link to to display the number of records with errors and the row numbers in which those errors occur.

Ignored records will not be included in scan result statistics or displayed in scan reports, including Not Found reports.

OnAny batch file with incorrect formatting or containing invalid data will be rejected and the batch scan will show an error. Error will be displayed against the scan in the Batch Scan History Status column.

Additional notes on invalid batch files

Batch files where all records are invalid will not be accepted.

Ignored records are not included in scan result statistics or displayed in scan reports, including Not Found reports.