KYCnet, the world's first KYC-as-a-service company, and Smart KYC are among the thrusting, youthful firms on the 'know your customer' software market today. Celent, the financial software analysis consultancy, has just conducted a "review of the new."

Celent writes: "The need to ensure enterprisewide compliance is giving rise to centralization and standardization of AML operations, and integration of AML and anti-fraud programs. To capitalize on these trends, solutions are emerging to address complete client lifecycle management functions across different lines of business. In particular, the KYC function is receiving a lot of attention from both banks and service providers."

One entry on Celent's list of up-and-coming firms is KYCnet, whose software offering, KYC Passport, is available in both front-office and factory-model versions, both configured for integration into front-office processes with the latter also supporting mid- or back-office operational demands through workflow, industrial resource planning, time-sheeting, project and 'key performance indicator' reporting. It offers users its own "best-practice standards" to work by and contains risk-assessment criteria, tables, process, rules, reports etc.

Celent lists Smart KYC as a semantic engine for KYC and due diligence. It is targeted primarily towards wealth managers and commercial/investment banks. Relationship managers who work for multi-jurisdictional financial firms seem to like its multi-language capacity the most. It takes the user through three main activities:

• looking at potential clients at the stage when RMs use it to prepare dossiers indicating both relevant sales information and early compliance warnings about these 'prospects';
• client on-boarding when bankers and compliance/KYC analysts use it for gathering information, determining identity and creating reports containing 'due diligence' on    
  new clients; and
• automatic and periodic updates of KYC    functions and the daily monitoring of 'client events' (both business-related and compliance-related).

This product is noted for its semantic and federated searches over multiple target sources and for understanding the searcher’s intent and the contextual meanings of terms, locations, variations between words, synonyms, generalised and specialised queries, concept matching and natural language queries. It allows names to be checked against customer-firms' internal lists, public lists (UN, OFAC, HM Treasury, EU, OSFI, MAS, FINMA, FBI etc.) and the lists of aggregators such as Dow Jones Watchlist, World‐Check and WorldCompliance. Checks from news sources such as Google and Twitter and ID data firms such as Experian are de rigeur, as are audit trails for everything. Search results are automatically checked for sense in their original language. Cloud storage for data is available.

Basis Technology's name translator, name indexer and 'entity extractor' (all given the name Rosette) offer the user multi-lingual text analysis, 'identity resolution,' and digital forensics. The firm's products support 55 languages. It claims that up to 80% of 'Big Data' is represented by 'Big Text,' i.e. large quantities of unstructured chunks of text in documents, web-pages, and databases with all the hallmarks of Big Data: the three Vs (volume, velocity, and variety). Big Text is also multilingual, covering many languages and scripts, in all of their complexities and challenges. The Rosette suite of products specialises in this, using linguistic analysis, statistical modelling and machine learning to process Big Text for the firm's compliance effort.

Thomson Reuters Accelus offers a 'screening resolution service' for KYC client on-boarding procedures which does the following.
• Highlights positive and possible matches for risky individuals and entities.
• Screens clients' records against the databases of World-Check and Country-Check.
• Offers optional EDD background investigation.
• Uses Screening Online software with name-matching methods.
• Has a 'quality assurance' process in place.
• Constructs audit trails.

Safe Banking Systems analyse watchlists and 'resolve entities'. This mysterious phrase refers to the need to reconcile database references that correspond to the same entities. Name-matching IT commonly uses pair-wise comparisons of 'reference attributes' such as names, addresses or dates of birth. The absence of sufficient attributes produces false positives, but there is often additional relational information in the data with references to different entities. SBS's method differs from pair-wise comparisons by using both attributes and relational information; it helps users to link records together and applies "likelihood and probability scoring" to detect matches between identities.

Digital Reasoning, through its 'Synthesys' product, offers natural language processing and unstructured data analysis. It tries to "understand data in a human-like way." Celent also lists Fenergo as a force to be reckoned with. Its 'client lifecycle management' system offers consolidated data and process management for KYC and/or AML purposes and for the purposes of regulatory compliance. This workflow software features a business rules engine, business process management, document management and case management.

* Celent is a research & consultancy firm that focuses on technology in financial services.