Politically exposed persons (PEPs) are at a higher risk of corruption and money laundering, according to industry regulators and the Financial Action Task Force (FATF).To reduce these risks, financial institutions must implement certain measures, including obtaining customer identification materials and establishing fund sources. This requires precise and up-to-date PEP data, which banks and FIs can use to screen entities during onboarding and enhance their security.

Why is PEP Screening Needed?

PEPs are acknowledged by industry authorities as well as the FATF as having a higher risk of corruption and potential for money laundering or funding terrorism. In reaction to these identified concerns, financial institutions (FIs) must put enhanced due diligence (EDD) procedures in place. In order to meet these regulatory requirements effectively, the availability of precise and current PEP data is imperative for financial institutions. Access to such information is instrumental in facilitating thorough entity screening during the onboarding process.

What are the Essentials in PEP Screening?

1. Researching Local Legislation

Data ingestion begins with researching the local legislation as there is no universal legislation for PEP, thus every country’s legislation is deeply analyzed by research analysts.

2. Matching Requirements with Internal Taxonomy

After the local requirements are found, they are compared to internal inclusion criteria. This is a crucial step since every country has different qualifications. Getting familiar with local legislation helps to standardize coverage by matching to the internal taxonomy.

3. Checking Existing Data

After comparing the data of local legislation and internal criteria, consideration is given to existing data for the respective jurisdiction. This involves examining current coverage and verifying the most relevant data sections periodically to avoid duplicate data.

 For improvement projects, relevant institutions or companies are identified in the jurisdiction. The evaluation of each institution is to determine leadership positions qualifying as PEPs in accordance with jurisdictional legislation and internal classification.

4. Conducting a Four-Eyes Check

After a research project is completed, viewing the resulting documentation in case of potential errors or missing information. This critical step corrects human errors and adds an extra layer of quality assurance to the data.

5. Ingesting Data from the Source Website

For every identified institution, web scraping is employed to gather and store data from the source website displaying the most comprehensive and accurate data from official sources. Various checks are implemented throughout this process to ensure the highest data quality.

6. Enriching PEP Profiles

After the initial data ingestion, each new PEP profile is enriched with additional information from various search engines. This improves the differentiation of PEP profiles, providing added value to customers. The unique data structure allows for regular updates and timely corrections.

7. Updating Profiles to Reflect Status Changes

Swiftly reflecting updates prioritizes high-risk sources with minimal human intervention. Dedicated teams, integral in creating advanced data structures, consistently strive to meet high customer standards. When a PEP ceases their mandate or resigns, resulting in removal from the source website, the database is promptly updated with a ‘removal date’ tag, ensuring accurate and up-to-date information for users.