Know Your Customer legislation requires financial
institutions and other regulated companies to verify who their customers and
business partners are to prevent money laundering and terrorism financing. To
be compliant these companies simply check customers against available
watch-lists of known criminals and terrorists. However, in order to properly
assess their operational, regulatory and reputational risk, companies may want
to go further in their due diligence by validating a customer’s identity and profile,
understanding the customer’s business activity and identifying any existing
Specialist companies in the fields of open source
intelligence, KYC and regulatory compliance provide businesses with such a
Mongoose’s software application gives financial
institutions, law firms, professional service providers, compliance officers,
law enforcement and anybody else who is concerned with know-your-customer
regulations and operational risk reduction access to a database of all global
sanctions and enforcement watch-lists, tens of thousands of politically exposed
persons and a media library that is enhanced with over 500,000 news media
reports each day.
Mongoose is a Bermuda based company that is both
intelligence and technology driven, says the firm’s Chairman Alan Tennant
Johnson. “We are great believers in delivering not just information, but
intelligence, because if you deliver too much information to an individual they
cannot make a decision.”
He says Mongoose Global Intelligence aims to help clients
from a compliance and commercial point of view. “Banks don’t want their staff
to spend five hours on one application.”As a result the user interface of
Mongoose’s service is very easy to use, requires no training and delivers the
requested information quickly.
Users can obtain information on clients or prospective
business partners in up to four increasingly more in-depth search stages. These
searches check the available watch-lists of international law enforcement
agencies, secret services and regulators as well as politically exposed
persons, provide KYC and adverse media profiles and a passport verification
Johnson sees an increasing need for such KYC and
compliance applications. “In our opinion there is a tsunami of regulation on
its way for financial institutions.” Regulators have seen in the last two to
three years what happens when banks are lightly regulated, he adds. “There can
be no doubt that there is a massive change in the wind, which has only just
Johnson says the big challenge for open source
intelligence service providers is to obtain relevant data to prevent false
positives. False positives are cases where the compliance software flags a
particular name, because the available information matches a name, but upon
further analysis does not match the person.
False positives are the compliance industry’s biggest
problem, says Johnson, because they increase the time and expense needed to
review the suspected match.
Mongoose’s service aims to remove human error from the
open source intelligence gathering process to reduce the number of false
“At Mongoose we believe that the fewer people are
involved in the process the better, because open source intelligence is data
and if you are transferring data manually from one system to the other data
corruption or pollution is inevitable,” says Johnson.
Instead of human input Mongoose relies on name matching
algorithms, clustering and data analysis techniques to collect, structure and
index data from over 2,000 news, intelligence and information sources.
Using data connecting algorithms and pre-defined,
customised filter rules, the software automatically generates detailed
portfolios and profiles.
These types of sophisticated algorithms are also used by
law enforcement, secret service and government agencies, says Johnson.
The system is multilingual and supports more than 80
languages using over 40 character sets. The application is accessible over the
Internet, but can also be integrated into a customer’s database, explains
Mongoose will be charging a flat annual license fee per
user, rather than break down the costs according to usage. “We don’t believe
that this should be complicated,” says Johnson, who notes that businesses want
to know the cost of a