The second area of challenge is the inconsistent method of transliteration of names. This is especially true in the Indian context where partial names, aliases, transliteration, different spellings of names, name reversal, shortened names, etc, are common. The degree of fuzzy logic threshold definition may lead to either increased false positives or missing the name altogether. This leads to a situation where the banks are put in a quandary to decide on increased cost of investigating false positives or non-compliance to regulatory requirements. This issue gets compounded by the incomplete information on the sanctioned entities in the list.
The third area of challenge is technology. With the increase in volume of transactions, it is imperative for the financial institutions to seek the help of IT solutions. But, unfortunately, just implementing an IT solution is not the panacea for this problem and can introduce a host of other difficulties as well. The biggest issue for a software solution is the inherent difficulty of the screening process, i.e., calibrating the fuzzy logic programme and integrating data that may reside in silos.
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