Name screening for AML

CLM customer journeys uses the eScreening case type (CSC-) to perform name screening of an individual or an organization. As part of an eScreening case, the KYC Analyst can review and address any matches returned from the screening provider. The CLM cases trigger screening measures at the following stages:

• Enrich stage: An eScreening case is created for a contracting party when the CLM case reaches the Enrich stage and enters the Customer Investigation process.  The case is triggered only when eScreening data is unavailable or the available customer screening data has expired.
• Due diligence stage: If the screening is not performed for the contracting party in the Enrich stage or if the screening data has expired, an eScreening case would be created as part of the Global KYC (GKYC) case in the Customer Due diligence stage. eScreening cases are also created for related parties as part of the Global KYC case corresponding to each related party.

An eScreening case contains four stages:

• Data exchange: the World-Check screening service is invoked, and screening results are retrieved. Before invoking the screening service, a check is made to see if the screening results are available in the customer's master profile. If the results are available and are valid, for example, the screening data is not yet expired, then the results from the customer's master profile are reused. If they are unavailable, the system creates a new case on World-check and places a screening request. This screening request is asynchronous and is completed based on available resources. Processing times can greatly vary, so before retrieving the results, the eScreening case checks the audit log to see if the screening is complete. If completed and the screening results are unavailable, the system will wait one minute before rechecking the audit log. After a successful screening, the results are retrieved from World-Check and populated into the case.
• Investigation: screening results are displayed to the KYC Analyst. The KYC Analyst can open the profile of the screening matches and take a detailed look at the match profile before taking action on the screening match. Matches can be bulk resolved or individually resolved by selecting the appropriate risk and status.
• Synchronization: the screening results are synchronized to the customer master profile. The risk assessment and AML CDD profiles logic is re-executed to consider any screening-related risks.
• Resolution: after the screening matches are resolved, a risk assessment is performed to consider the outcome of the resolution.

In the following image, click the + icons to learn about the stages of the eScreening case:

If potential matches are found for the customer then the flow moves to the Investigation stage, in which it invokes an Investigate Matches process. This process waits until screening matches are reviewed and resolved by a KYC analyst.

In the following image, click the + icons to learn about the Investigate matches assignment window:

With increasing regulation in the financial industry there is pressure to know customers better, which means determining the individual and organizational anti-money laundering (AML) risk profile of the customer. To do this, financial institutions need a model to understand the risk associated with the customers in their portfolio.

Assessments are made of many factors that will change over time and impact the risk, because the industry needs to have an overall risk assessment of the customer that is available at a glance, in which they can drill down to understand the individual factors of the overall risk.

Risk determined from name screening assessments falls under the External Data risk category. This risk factor is also calculated based on other third party data, such as:

• ID Verification
• Fraud Check
• Credit Profile

Passed, Warning, NotPassed, and NA are the four values that a name screening assessment can return. Different risk scores are associated with each of these four values, with NotPassed having a high risk score and NA and Passed having a low risk score. The eScreeningAssessment decision table considers the resolution values of the screening matches and returns a value for the screening risk, as in the following figure:

All of the dynamic questionnaires used by the application to support the due diligence functions are powered by the Pega Know Your Customer engine.

The outcome of the name screening is automatically propagated to the relevant Global AML KYC type. Name screening covers three different categories:

1. Politically Exposed Person (PEP)
2. Law/Regulatory enforcement
3. Sanctions

In the case of PEPs, additional details about the political relation, position, end date, and so on, need to be answered.

The following figure shows the questions that are asked as part of KYC Global AML Due Diligence:

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