Product Spotlight: Intelligent Screening for Politically Exposed Persons

At Parcha, we're constantly innovating to solve the most pressing challenges faced by fintechs and banks. Today, we're excited to highlight our latest breakthrough: Intelligent PEP Screening. This AI-driven feature is set to transform how financial institutions handle Politically Exposed Person (PEP) checks during customer onboarding.

The Problem

PEP Screening Inefficiencies

Identifying Politically Exposed Persons (PEPs) is crucial for customer due diligence, yet the process is riddled with inefficiencies. Traditional screening methods often yield numerous false positives, posing significant challenges for financial institutions. These inaccurate alerts lead to delays in onboarding, higher operational expenses, and compliance risks. Manual review processes further exacerbate the issue, impacting customer satisfaction and retention.

Reports indicate that as many as 90% of PEP alerts are false, burdening compliance teams. Outdated databases, complex listings, and geopolitical shifts contribute to the high rate of false positives. This strain not only depletes resources but also raises the likelihood of genuine PEPs going undetected amidst the noise. Many firms are abandoning these checks due to poor accuracy. A survey by IFA Magazine revealed a sharp decline in firms consistently screening customers against sanctions or PEP watchlists.

The surge in false positives has made these traditional PEP checks irrelevant, forcing institutions to balance thorough screening with operational efficiency.

The Solution

Intelligent PEP Screening

Parcha's Intelligent PEP Screening leverages cutting-edge AI to transform this process. Here's how it works:

1. Comprehensive Profile Generation: Parcha goes beyond checking sanctions and watchlists when building profiles. Parcha also flags close associates and relatives of sanctioned parties, and anyone investigated or convicted for financial crime, slavery or human abuse-related activities.
2. Intelligent & Accurate Matching: Parcha's AI examines details such as name, country of residence, nationality, and date of birth, comparing them against global PEP lists, law enforcement lists and proprietary sources.
3. False Positive Reduction: Advanced algorithms filter out potential false matches, accounting for common name variations by factoring cultural nuances and estimating age ranges based on a PEP’s previous roles to dramatically reduce false positives.
4. Confidence-Based Flagging: Parcha only flags clients for manual review when a multitude of inputs indicate high confidence. For example, our AI factors the recency of a PEP result into its decisioning.

Key Benefits

1. Improved Accuracy: Significantly reduce false positives, allowing your team to focus on genuine PEP matches.
2. Time Efficiency: Eliminate hours spent manually reviewing low-quality PEP alerts.
3. Enhanced Compliance: Ensure thorough screening against global PEP lists and associated parties while maintaining regulatory compliance.
4. Faster Onboarding: Accelerate the customer onboarding process by reducing unnecessary delays.
5. Better Customer Experience: Minimize friction and maximize trust when onboarding new clients by only flagging PEP concerns with multiple signals and confidence.

Customization and Integration

We understand that every financial institution has unique compliance needs. That's why we've made our Intelligent PEP Screening feature highly customizable:

• Adjust sensitivity levels for PEP matching; fine-tune a combination of match thresholds that suit your business’ risk appetite
• Customize which global PEP lists to check against
• Integrate seamlessly with your existing onboarding flow through our robust API for instant screenings

Looking Ahead

Intelligent PEP Screening is just one piece of our comprehensive compliance and onboarding solution. We're committed to continually enhancing our platform to address the evolving needs of the fintech and banking industries. Stay tuned for more innovations that will help you onboard customers faster, more securely, and with less friction.

Ready to accelerate your compliance processes?

Reach out to our team at founders@parcha.ai to see how Intelligent PEP Screening can work for your business.

At Parcha, we're not just building features; we're crafting solutions that drive real business impact. We can't wait to see how you'll use this to streamline your compliance efforts and accelerate your growth.