Entity-Resolution Report Quantexa

Entity Resolution and Linking: Enabling
Next-Generation Financial Crime Detection
APRIL 2019
Julie Conroy
Complimentary access to this Aite Group report is provided by:
© 2019 Aite Group LLC. All rights reserved. Reproduction of this report by any means is strictly prohibited.
Entity Resolution and Linking: Enabling Next-Generation Financial Crime Detection APRIL 2019
TABLE OF CONTENTS
IMPACT POINTS .............................................................................................................................................. 4
INTRODUCTION .............................................................................................................................................. 5
METHODOLOGY ........................................................................................................................................ 5
THE MARKET ................................................................................................................................................... 6
CUSTOMER DATA: THE DIAMOND IN THE ROUGH ......................................................................................... 8
EXTRACT, TRANSFORM, AND LOAD (ETL) VALIDATION ............................................................................ 8
ENTITY RESOLUTION ................................................................................................................................. 9
DYNAMIC SEGMENTATION ..................................................................................................................... 11
NETWORK LINK ANALYSIS ....................................................................................................................... 13
CUSTOM MODEL SUPPORT ..................................................................................................................... 15
KEY ATTRIBUTES ...................................................................................................................................... 16
SOLUTIONS ................................................................................................................................................... 18
ARACHNYS............................................................................................................................................... 21
AYASDI .................................................................................................................................................... 22
BAE SYSTEMS .......................................................................................................................................... 23
DATAVISOR ............................................................................................................................................. 24
FEATURESPACE ....................................................................................................................................... 25
FEEDZAI ................................................................................................................................................... 26
FICO.. ....................................................................................................................................................... 27
IBM….. .................................................................................................................................................... .28
NICE ACTIMIZE ........................................................................................................................................ 29
PITNEY BOWES ........................................................................................................................................ 29
QUANTAVERSE ........................................................................................................................................ 31
QUANTEXA .............................................................................................................................................. 32
QUANTIPLY.............................................................................................................................................. 33
SAS…........................................................................................................................................................ 34
SIMILITY .................................................................................................................................................. 35
CONCLUSION ................................................................................................................................................ 37
RELATED AITE GROUP RESEARCH ................................................................................................................. 38
ABOUT AITE GROUP...................................................................................................................................... 39
AUTHOR INFORMATION ......................................................................................................................... 39
CONTACT ................................................................................................................................................. 39
LIST OF FIGURES
FIGURE 1: ETL UI SURFACING EXCEPTIONS .................................................................................................... 9
FIGURE 2: EXAMPLE OF DYNAMIC SEGMENTATION TECHNOLOGY ............................................................. 12
FIGURE 2: EXAMPLE OF NETWORK LINK ANALYSIS ...................................................................................... 14
2
101 Arch Street, Suite 501, Boston, MA 02110 • Tel +1.617.338.6050 • Fax +1.617.338.6078 • info@aitegroup.com • www.aitegroup.com
LIST OF TABLES
TABLE A: THE MARKET .................................................................................................................................... 7
TABLE B: KEY ETL FUNCTIONALITY .................................................................................................................. 9
TABLE C: KEY ENTITY RESOLUTION FUNCTIONALITY .................................................................................... 10
TABLE D: KEY DYNAMIC SEGMENTATION FUNCTIONALITY .......................................................................... 13
TABLE E: KEY NETWORK LINK ANALYSIS FUNCTIONALITY ............................................................................ 15
TABLE F: KEY CUSTOM MODELING FUNCTIONALITY .................................................................................... 16
TABLE G: VENDORS OF ENTITY RESOLUTION AND LINK ANALYSIS FOR FINANCIAL CRIME MITIGATION .... 18
TABLE H: FINANCIAL CRIME PLATFORMS’ ENTITY RESOLUTION AND LINK ANALYSIS FUNCTIONALITY ....... 19
TABLE I: FINANCIAL CRIME PLATFORMS’ ENTITY RESOLUTION AND LINK ANALYSIS ATTRIBUTES .............. 20
3
IMPACT POINTS
• Financial crime activity is accelerating at an unprecedented pace, and currently, the
good guys are losing the war. The United Nations Office on Drugs and Crime
estimates that between 2% and 5% of global gross domestic product is laundered
annually, which translates to between US$800 billion and US$2 trillion per year. Less
than 1% of this is caught, even as businesses worldwide spend tens of billions of
dollars annually on technology and staff to combat the problem. In the face of these
challenges, many banks and fintech companies are making substantial investments
in technology that can help them harness the power of internal and external data.
• Critical components of the next-generation approach to financial crime mitigation

include effective data wrangling, entity resolution, and linkage. Firms require the
ability to ingest large volumes of data from multiple sources, reconcile the data into
a single customer view, and uncover the networks within the data that can underpin
models to detect patterns indicative of financial crime and other risks. These
approaches are required for retail and commercial banking as well as capital markets
use cases.
• Banks’ customer data stores are typically siloed, with widely varying degrees of data
currency and cleanliness. To convert this “diamond in the rough” into actionable
analytic inputs, banks require technology that can help automate a variety of data
wrangling and analysis tasks, including automated extract, transform, and load (ETL)
validation, entity resolution, dynamic segmentation, network link analysis, and
custom modeling.
• These technologies don’t only have the ability to reduce expenses; firms that use
advanced technologies to vet customers’ identities, transactions, and behaviors
differentiate themselves from their competitors, as they provide more responsive
and streamlined customer interactions and efficiently meet regulatory
requirements.
• This report is informed by over 40 interviews from Q2 2018 through Q1 2019 with
financial services executives responsible for anti-money laundering (AML)
compliance or fraud in banks across five continents, as well as interviews with over
20 vendors in the financial crime space.
4
INTRODUCTION
Financial crime activity is accelerating at an unprecedented pace, and currently, the good guys
are losing the war. The United Nations Office on Drugs and Crime estimates that between 2%
and 5% of global gross domestic product is laundered annually, which translates to between
US$800 billion and US$2 trillion per year. Less than 1% of this is caught, even as businesses
worldwide spend tens of billions of dollars annually on technology and staff to combat the
problem. Fraud is also a painful and evolving problem. Organized crime rings are applying
automation and social engineering tactics to the more than 14 billion data records that have
been lost or stolen since 2013, resulting in mounting application fraud, account takeover, and
card-not-present fraud losses for firms around the globe, the proceeds of which are then
laundered.
In the face of these challenges, many banks and fintechs are making substantial investments in
advanced analytics that can help them harness the power of internal and external data. While
the potential of this approach is powerful, advanced analytics are only as good as the data
inputs. Critical components of the next-generation approach to financial crime mitigation include
effective data wrangling, dynamic segmentation, entity resolution, and network link analysis.
Firms require the ability to ingest large volumes of data from multiple sources, reconcile the data
into a single customer view, and uncover the networks within the data that can underpin models
to detect patterns indicative of financial crime.
This Impact Report identifies the key capabilities that banks need to help them effectively and
efficiently harness their data and turn it into their biggest asset in financial crime detection. It
also assesses the capabilities of various vendors and their ability to answer banks’ entity
resolution, dynamic segmentation, and link analysis needs.
M E T H O D O LO GY
This report is informed by over 40 interviews conducted from Q2 2018 through Q1 2019 with
financial executives responsible for AML compliance or fraud in financial services firms across
five continents, as well as interviews with over 20 vendors in the financial crime space.
5
THE MARKET
To executives tasked with combating financial crime, it often feels like a lopsided game of chess,
where the bad guys get three moves for every one move that the good guys get. The challenges
are not limited to the rapidly escalating attack vectors; the following all represent significant
pressures as well:
• Regulatory requirements for financial firms’ ability to detect money laundering

continue to mount. The price of failure is hefty fines (banks worldwide have paid
several billion dollars in fines for AML lapses since 2010), embarrassing headlines,
and potential liability for the firm’s chief AML officer in the form of personal fines
and even jail time.
• Innovation in financial services is creating an ever-growing attack surface. Faster

payments and the increasing electronification of payment flows create utility for
businesses, but criminals benefit from these innovations as well.
• Customers’ expectations for a smooth and easy experience put pressure on firms to
reduce lag time and friction across the customer life cycle. These expectations start
at the onboarding process and extend throughout the customer journey.
• Legacy technology that produces high volumes of alerts, false positives, and often
false negatives compounds the challenges that banks face. Banks often have to
throw bodies at the problem to keep up with alert volume. This is not only expensive
but often problematic in terms of finding skilled analysts to fill these positions.
• Social pressure from citizens who feel that banks, as trusted custodians, have an
ethical obligation to detect and intercede in money laundering, human trafficking,
and fraud incidents.
Customer data represents a critically important asset that financial institutions (FIs) can use to
address all these issues. Harnessing that data so that insights can surface represents a significant
challenge for many banks, however. To extract the insights in the data, FIs must employ effective
data cleansing, entity resolution, enrichment, and analysis processes. Without these critical
steps, the old truism “garbage in, garbage out” is the result.
The good news is that technology has progressed rapidly over the past few years, and a variety
of advanced analytical techniques can help banks turn their data into intelligence. Increasingly,
the use of these technologies is becoming the regulatory expectation as well, as evidenced by
the December 2018 joint statement issued by the U.S. Treasury Department’s AML unit and U.S.
1
federal banking regulators, which encouraged FIs to consider innovative approaches to AML.
The EU is even further ahead, with a variety of requirements embedded in the fifth AML
directive that dictate elements of advanced analytics for effective compliance.
1. Penny Crosman, “Is Regulators’ Green Light on AML Tech a Game Changer?” American Banker,
December 5, 2018, accessed January 2, 2019, https://www.americanbanker.com/news/is-regulators-
green-light-on-aml-tech-a-game-changer.
6
Table A summarizes the key trends driving banks’ next-generation financial crime strategies.
Table A: The Market

Market trends Market implications
Escalating criminal attacks on Organized crime rings, rogue nations, and terrorists are all
banks use advanced technology. leveraging automation and artificial intelligence in their attacks on
the financial ecosystem. These sophisticated attacks, combined
with the growing volume of electronic payments, make it difficult
for FIs to keep pace with the rising tide of alerts.
Regulators are encouraging FIs Especially in the AML arena, concern over regulatory response to
to use more sophisticated the use of advanced analytics has been an inhibitor to adoption.
detection techniques. The new openness among regulators is encouraging FIs to invest in
technology that can help them extract intelligence from their
customer data.
Banks are looking for While many FIs initially turned to outsourcing first- and second-
operational efficiencies. level alert triage to less expensive offshore locations, the benefits
of these strategies were short-lived, as alert volumes continue to
multiply. Many banks are now focused on tackling the source of
the issue—dirty source data and high levels of false-positive alerts.
Adoption of next-generation Firms that use advanced technologies to vet customers’ identities
financial crime technology is and transactions differentiate themselves from their competitors,
creating competitive as they provide more responsive and streamlined customer
differentiation. interactions, improve their operational efficiency, and meet
regulatory requirements.
Source: Aite Group
7
CUSTOMER DATA: THE D IAMOND IN THE ROUGH

Banks’ customer data stores are typically siloed, with widely varying degrees of data currency
and cleanliness. To convert this diamond in the rough into actionable analytic inputs, banks
require technology that can help automate a variety of data wrangling and analysis tasks. The
essential building blocks of this process are described in the subsequent sections, with the core
functionality discussed first, followed by key attributes that are important to effective and
efficient solutions.
E XT R AC T, T R A N SF O R M , A N D LOA D (E T L ) VA L IDAT IO N
The first step in harnessing a bank’s data is the ETL process. This consists of extracting the data
from source systems, transforming the data into the standardized format used at the
destination, and loading the transformed data into the destination system. While
straightforward in concept, this process is often challenging in practice. Banks’ data is usually a
mess, with widely differing data schemas and update frequencies, input errors such as fat-
fingering, default data population, random insertion of symbols, and field transpositions. All this
drives downstream false-positive noise unless addressed early on.
Automated validation and cleansing of data during the ETL process can drastically reduce the
impact on day-to-day operations. Technology can help automate identification and resolution of
issues by performing field-level analysis during the ETL process and surfacing exceptions to be
resolved before the data hits the alert-generation stage (Figure 1). With some platforms, these
issues must be worked by a firm’s IT team or the vendor’s professional services team, while
other systems provide user interfaces (UIs) that enable analysts to work the issues without the
need to involve IT or incremental expense. Next-generation solutions should be able to coexist
with and leverage FIs’ existing investments in ETL tools and skills. However, often the challenge is
the cleansing process, requiring more sophisticated tools that can cope with poor data quality by
triangulating across multiple internal sources, enriched by external data.
8
Figure 1: ETL UI Surfacing Exceptions
Source: DataVisor
The format of the data is another important consideration during ETL. Financial crime platforms
are currently primarily analyzing structured data, mostly due to FIs’ limitations in feeding
unstructured data into these systems. Most executives realize, however, the promise of effective
ingestion and analysis of unstructured data. In use cases from analysis of trade finance invoices
for money laundering to streaming mobile banking logs, there is a wealth of insight to be
gleaned from unstructured data. This input will be increasingly important to next-generation
financial crimes platforms, further reinforcing the need for effective ETL processes. Table B lists
key capabilities FIs look for vendors to support from an ETL perspective.
Table B: Key ETL Functionality

Functionality Description
Accepts structured, unstructured, and Able to accept all forms of data via a variety of input
semistructured input data mechanisms
Automated ETL validation Validate data fields upon import and identify issues
Surface exceptions via a UI Provide a UI in which bank employees can review and
resolve data issues without the need to involve IT or
vendor resources
Source: Aite Group
E N T IT Y R E SO LUT IO N
Entity resolution is another crucial aspect to the performance of next-generation financial crime
analytics. Once data are ingested from multiple source systems and cleansed, then the variations
of customer name and persona must be resolved into a single source record. Data cleansing can
9
often be automated to an extent. Data inconsistencies manifest in a number of ways, which can
also often be resolved in an automated fashion:
• Name variants: Naming conventions, spellings, and nicknames vary widely, and a
wide variety of names can represent the same individual. For example, “Rosa Maria
Moreno Sanchez” could be in one data silo as “Rosa Moreno,” in another as “Rosa
Sanchez,” and in a third as “Rosa Maria Sanchez.” The problem is often even more
pronounced in the business environment; multiple companies may have very similar
names, or differently named subsidiaries may be part of the same company.
Effective entity resolution solutions need to have the ability to help a firm resolve
naming variations and cope with data of varying quality from multiple sources.
• Address issues: Addresses are also quite problematic from a data input perspective
and require vendors with expertise in global address standardization.
• Typos: In addition to formatting differences, human error comes into play when it
comes to entity resolution challenges in the form of typos.
A customer may be represented by many different names in the various external data
repositories that an FI accesses to help verify customer identity. Platforms need the ability to
effectively resolve entities in a single customer view, which incorporates the key data elements
from both internal and external sources to help an enterprise resolve its multiple customer data
records and establish the elusive “golden record” for its current and future customer
interactions.
Best-in-class solutions often bring data enrichment capabilities as well, which are useful not only
in entity resolution, but also to provide additional context about the customer that is useful in
both financial crime and marketing analytics. For example, at the time of account origination, a
customer provides the basic information required on the onboarding form (e.g., name, date of
birth, tax identification number). Through data enrichment, however, the bank can glean
additional details about the customer, such as marital status, other financial transactional
relationships, social media engagement, and more. Entity resolution is not only useful when
applied to the bank’s own customer data, but it is also applicable to external watch list data,
which are often duplicative, so entity resolution of those lists can reduce aggregate alert volume.
Table C lists key capabilities banks look for vendors to support from an entity resolution
perspective.
Table C: Key Entity Resolution Functionality

Data FIs look for the ability to parse and cleanse data and have a consistent set of fields
standardization for individual names, company names, addresses, phone numbers, etc. This should
include reconciliation of global address formats and the ability to apply fuzzy logic
to individual or company names. No environment will ever have perfect data
quality, especially as criminals attempt to hide their identities. It is therefore critical
that any entity resolution capability be able to maximize the use of all available
data to produce high-quality resolved entities.
10
External data External data is an essential component of effective AML and fraud mitigation. Lists
enrichment of sanctioned individuals, politically exposed persons (PEPs), or those convicted of
financial crime or reports of corrupt individuals, digital identity data, and other
adverse media need to be joined with the single customer views to enrich them.
Furthermore, as criminals make use of opaque company structures to obfuscate
funds movement, ultimate beneficial ownership (UBO) has become a key focus for
regulators. These UBO structures can be discovered by enriching customer data
with shareholding and directorship structures using third-party data.
Real time and Best-in-class entity resolution solutions will enable a real-time application
batch programming interface (API) to support automated decisioning models, as well as
being able to resolve the data in batch to support data scientists.
Transparency End users at FIs need to be able to drill down into an entity and see exactly how
and why different data records were matched to be the same entity.
Dynamic During investigations, a frequent requirement is to be able to dynamically adjust

adjustment the entity resolution record matching logic. For example, a user may want to
amplify fuzzy matching for high-risk entities, and dial it down for low-risk entities.
Coexistence Many organizations will have an MDM capability designed to provide an

with master operational single view of a customer, but this is generally not extensive nor will it
data include external data, such as company structures and shareholdings or adverse
management lists. However, it may have useful match keys, and it should be possible for the
(MDM) systems entity resolution capability to leverage these.
Single customer Organizations hold data about their customers (individuals or businesses) across a
view multitude of records, products, transactions, and channels, often without a unique
customer key. A single customer view pulls all this data together to provide a
unified view of all the data through history. However, not every record will contain
the same set of data; for example, a name may not always have a date of birth, or
it could have different addresses. For business customers, this is even more
complex, as entities often have subsidiaries or branches and company names that
are not unique. The challenge is further complicated, as criminals use this diversity
of data and associated quality issues to hide their identities, or they use shell
company structures in an attempt to remain opaque. The entity resolution process
needs to be able to operate in a transparent manner in order to join this data
together appropriately without the human intervention often associated with
MDM systems.
Source: Aite Group
DY N A M IC S EG M E N TAT I O N
Segmentation is a key tool used in AML to uncover anomalistic behavior patterns (Figure 2).
Legacy AML systems take a blunt approach to customer segmentation by assigning customer risk
scores at the time of onboarding and using largely rules-based systems to determine over time
whether those risk ratings require alteration.
Dynamic segmentation uses machine-learning-based clustering and/or graph analytics to analyze

customers’ behavior and create segments based on actual transactional behaviors, rather than
11
data supplied at the time of onboarding. This not only enables deployment of transactional
analytics that are more appropriate for the customer’s actual behavior (thus minimizing false
positives and increasing detection), but also enables FIs to detect customers that intentionally
misrepresent their intended transaction patterns at the time of onboarding. Dynamic
segmentation also enables AML and fraud analytics to evolve with customers as their financial
position changes over time. Customers’ movement between segments is not just informative for
financial crime analytics; dynamic segmentation can be very useful for marketing, credit risk, and
other bank use cases as well.
Figure 2: Example of Dynamic Segmentation Technology
Source: Ayasdi
Dynamic segmentation is particularly important when monitoring complex AML risks such as
those associated with businesses or high-network individuals, especially regarding customer due
diligence (CDD) and enhanced due diligence (EDD). Many legacy CDD and EDD workflows employ
a fairly binary approach to segmenting customer risk, relying on rules-based processes for
aggregate dollar volume, value, and transaction types. In the wholesale banking environment,
companies’ behaviors vary widely and most corporations use complex instruments in their
business, such as foreign exchange, trade finance, equity trading, commodity hedging, etc. In
these situations, it is important to allow companies to move from one dynamic segmentation to
another and to use the multitude of features available in the data to apply models appropriately.
The segmentation is not just based on company size, but should be based on the company, its
trading network (i.e., entities with which the company does business), and the variety of
features available within the transactional details.
Table D lists key capabilities banks look for vendors to support from a dynamic segmentation
perspective.
12
Table D: Key Dynamic Segmentation Functionality

Data clustering Clustering is an unsupervised machine-learning technique
that involves the grouping of data points into specific groups.
Data points in the same group will have similar properties,
characteristics, and behavior patterns.
Dynamic ability to recategorize As entities’ behavior and/or characteristics change, they will be
entities recategorized into other segmentations.
Customer segmentation based on The dynamic segmentation should be able to act on linked data
resolved entities and networks and the network of a resolved entity, particularly when dealing
with businesses or high-net-worth individuals.
Source: Aite Group
N E T WO R K L IN K A N A LYS I S
Banks are just beginning to realize the value of effective network link analysis for financial crime
detection and investigation. Link analysis helps banks analyze vast amounts of customer and
public data to discover anomalies indicative of AML or fraud by uncovering connections between
customers and accounts (Figure 3). In the real world, people have complex interpersonal
networks; an understanding of these relationships can provide important insight into the risk of
the individual. Most traditional bank risk assessment systems focus primarily on the individual
and pay little attention to their associations.
Link analysis enables firms to identify patterns among identities (e.g., one Social Security
number associated with multiple names or an email associated with multiple name/address
combinations). Market-leading tools graphically display the resulting networks in an interactive
manner in order to facilitate investigation.
13
Figure 3: Example of Network Link Analysis
Source: Quantexa
While link analysis has long been used as an investigative tool, it also has significant value as an
input to detection. A key attribute of next-generation financial crime platforms is the
enablement of network scoring as an input to detection routines. In fraud use cases, the analysis
of linkages between entities can help uncover evidence of synthetic identities, bust-out rings,
and mule activity. In AML, there are three distinct benefits. First, there is an increase in
effectiveness, as false positives can be significantly reduced. Second, coverage is improved, as
networks are essential in uncovering the complex AML typologies used by the most
sophisticated criminals, such as foreign exchange, equity trading, or precious metals. Finally,
investigation efficiency is improved, as transaction-level alerts for a given customer are
aggregated and the network is pre-populated with the risks already highlighted for investigators.
Link analysis is also a key way to understand beneficial ownership and uncover trade finance
irregularities, a crucial element of Know Your Customer (KYC) operations. The reality is that many
of these schemes are interconnected across the fraud and AML silos of a bank, even if the bank
does not work them in this way.
Link analysis capabilities are by no means one-size-fits-all. While many solutions will claim to
have link analysis, it’s important to dive into the details of what these solutions do in this regard.
Table E lists key capabilities banks look for vendors to support from a network link analysis
perspective.
14
Table E: Key Network Link Analysis Functionality

Real-time network building The ability to build and refresh network linkages in real time or near-
real time is important given the pace of financial crime. Refresh
frequency is a key question that should be asked when evaluating
firms’ capabilities on this front, because many firms cannot support
near-real-time refresh cycles due to the heavy data load.
Ability to incorporate network The ability to score suspicious linkage at the network level and bring
link analysis into detection these scores into detection is also important; not all platforms offer
routines this capability.
Ability to view networks with The UI should provide a clear representation to the analyst or
risks highlighted and investigator, highlight the suspicious linkages, and provide text
explained explanation of the issues.
Network link analysis Entity resolution is a key prerequisite to be able to build a network,
solutions should interact with as heterogeneous internal and external data need to be matched to
entity resolution create the networks.
Data lineage and evidence It is important that any investigations and networks can be accessed
from other systems, such as case management, with a full history of
the data at the point in time for evidential purposes.
Source: Aite Group
C USTO M MO D E L S U P PO RT
Data is the new oil—or the new kryptonite if it’s not properly used and analyzed. Banks have
realized that effective machine-learning models can help them maximize the value of their data
and are investing heavily in custom machine-learning models and other statistical techniques for
2
fraud and AML use cases.
The preferred method of deployment varies based on the size of the institution. Large global FIs
often have robust internal data science teams who want to deploy their own models that have
been internally developed in R, Python, etc. Regional banks typically want to rely on their
vendor’s model development capabilities, either via native model development within the
platform or the vendor’s outsourced data science resources. Processors are often looking for
multitenant capabilities that enable the processor to customize the models across their diverse
client base. While a good chunk of the platform requirements overlap for these target markets,
there is also a fair amount of required functionality that is unique to each.
Regardless of the approach to custom model creation, model transparency and explainability are
important attributes for AML and fraud use cases, because the ability to demonstrate how
models work and prove that vulnerable variables are not creating prejudicial outcomes is
2. See Aite Group’s report AIM Evaluation: Fraud and AML Machine Learning Platform Vendors, March
2019.
15
essential in the highly regulated banking environment. Table F lists key capabilities banks look for
vendors to support from a custom modeling perspective.
Table F: Key Custom Modeling Functionality

Support for import of The platform supports the import of models developed by the bank or
externally developed models by another third party.
Native model-building The platform enables the citizen data scientist at the client to build
capability and deploy machine-learning models across multiple use cases
integrated within the platform.
Vendor-created models Vendors build and deploy bespoke models for the client.
Support for entities and Models should be able to take resolved entity and network attributes
networks as an input. They should also be capable of rolling up risk factors to an
entity or network level.
Multiple methods Models should be able to leverage multiple libraries and

methodologies to be effective and flexible. This includes rules and
scenarios, a variety of supervised and unsupervised machine-learning
algorithms (e.g., XGBoost, random forests, Bayesian), clustering, time
series analysis, text mining, outlier analysis, and peer groups.
Batch and real time Models should be able to run in batch or real time, as dictated by the
use case.
Transparency and In most cases, the consumer of the output of a model is an analyst or
explainability investigator. The model should be able to relay to a user interface
why it has marked an individual, business, entity, transaction,
application, or network as suspicious.
Source: Aite Group
K E Y AT T R IB UT ES
A handful of key attributes are required in best-in-class entity resolution and network link
analysis solutions to ensure that the systems can meet the workflow and regulatory needs of
global banks’ financial crime operations, as follows:
• Investigative search: Investigators require the ability to search across all available
banking data, such as alerts, customer data, and transactions, in order to effectively
assess risk. Platforms need to provide the ability to do this across the breadth of the
bank’s customer data.
• Global data privacy compliance: Global banks have operations spread across
multiple countries. Across these jurisdictions exists a patchwork of privacy
regulations that govern the use of customer data, its storage, and cross-border data
access and usage. Platforms that enable entity resolution and network risk
assessment must have field-level abilities to restrict/enable access to customer data
16
to allow banks to comply with local data privacy requirements. In particular, when
investigators interact with entities and networks, the data should be presented
based on the user’s privileges in order to ensure that they cannot infer the presence
of sensitive data.
• Integrated platform: Some vendors provide the key functionality previously

discussed as part of one integrated product, while others have separate modules
that address the market needs (e.g., one module for ETL validation, another for
network link analysis). The preference of most banks is one integrated solution that
addresses multiple needs, since this is easier to integrate and support.
• Scale: The system should be able to resolve entities, generate networks, and run
models across large volumes of records so that all transactions can be used to create
networks, because it is not possible to pre-judge which transaction is the critical
suspicious transaction. Large Tier-1 banks will usually require scalability in excess of
20 billion records, while five billion to 10 billion records should suffice for smaller
institutions.
• Open standards and flexibility: As the AML and fraud threat landscapes escalate
rapidly and regulators react, so do technical challenges for FIs. Next-generation
platforms should be able to coexist with other technologies and allow third-party
commercial or open-source innovations to be quickly deployed. For example,
entities and networks generated by the system should be available in open
repositories such that they can be easily accessed by other modeling tools or those
tools run within the environment. APIs should be provided to allow the entities,
networks, and model output to be requested in real time to any required
specification. FIs may also want to access the value of resolved entities and networks
for other use cases outside of AML, such as marketing (to the extent that data
privacy restrictions permit).
17
SOLUTIONS
A number of vendors offer solutions that can meet all or part of the market needs previously
discussed. Some vendors position themselves as end-to-end solutions, while others offer
solutions that can be used either as stand-alone financial crime platforms or in conjunction with
incumbent solutions to improve detection and efficiency.
Table G lists leading vendors offering entity resolution, dynamic segmentation, and network link
analysis for financial crime mitigation. Some vendors position themselves as platforms that sit
side by side with existing detection engines, while others focus more on the detection side of the
equation. Table H indicates the extent to which these vendors can support the key functionality.
The ensuing subsections delve into more detail for each specific vendor.
Table G: Vendors of Entity Resolution and Link Analysis for Financial Crime Mitigation
Vendor Headquarters Founded Employees
Arachnys London 2010 90
Ayasdi Menlo Park, California 2008 89
BAE Systems London 1999 83,500
DataVisor Mountain View, California 2013 130
Featurespace Cambridge, U.K. 2008 200
Feedzai San Mateo, California 2009 394
FICO San Jose, California 1956 3,800
IBM Armonk, New York 1911 366,600
Nice Actimize Hoboken, New Jersey 1999 1,150
Pitney Bowes Stamford, Connecticut 1920 14,700
QuantaVerse Wayne, Pennsylvania 2014 27
Quantexa London 2016 160
Quantiply San Jose, California 2013 30
SAS Cary, North Carolina 1976 14,151
Simility Palo Alto, California 2014 80
Source: Aite Group, vendors
18
Table H: Financial Crime Platforms’ Entity Resolution and Link Analysis Functionality
Vendor Automated Entity Dynamic Network link Custom
ETL validation resolution segmentation analysis modeling
Arachnys ● ◕ ◔ ○ ○
Ayasdi ◑ ● ● ◑ ●
BAE Systems ◑ ◑ ◑ ◑ ●
DataVisor ◕ ◕ ● ● ●
Featurespace ◑ ◑ ● ● ◕
Feedzai ● ◕ ● ● ●
FICO ◑ ● ● ● ●
IBM ● ● ● ● ●
Nice Actimize ◑ ◑ ● ● ●
Pitney Bowes ◕ ● ● ● ◔
QuantaVerse ◕ ◕ ● ● ◔
Quantexa ● ● ● ● ◕
Quantiply ● ◕ ● ● ◕
SAS ● ● ● ● ●
Simility ◕ ◕ ● ● ●
Legend: ● = Fully addresses key functionality, ◕ = Mostly addresses key functionality, ◑ = Partially addresses key functionality, ◔ =
Addresses a few points of key functionality, ○ = Does not address key functionality.
Table I shows the extent to which the profiled vendors can meet the key attributes discussed
previously. The scalability metrics indicate the capacity of records vendors are able to load to
resolve entities and generate linked networks in a production environment. This metric is
quantified differently by many of the vendors—some quantify in terms of discrete records, while
19
others express scalability as the number of resolved entities—so explanatory text is included
where available. Some vendors don’t measure their scalability in this way, so data is not available
in those cases.
Table I: Financial Crime Platforms’ Entity Resolution and Link Analysis Attributes
Vendor Investigative Global data Integrated Entity resolution/link Open
search privacy platform analysis scalability standards
compliance
Arachnys ● ◑ ● Not available
○
● ◑ ● Ayasdi measures
scalability as a grid of rows
●
and columns. Its solution
Ayasdi
has processed a grid of
one billion rows and
columns.
BAE Systems ● ◕ ◑ 7 billion records monthly

○
DataVisor ● ● ● More than 1 billion

◑
Featurespace ● ◑ ● 750 million resolved

entities
◕
● ◑ ● Feedzai supports 150

million entities created
○
from 30 billion individual
records where entity and
linkage graphs are built
Feedzai
from transaction flows as
they happen in real time.
For visual link analysis, the
system can scale to more
than 20 million entities.
FICO ● ● ○ 500 million records

○
IBM ● ● ◔ Not available

●
Nice
Actimize
● ◑ ◑ Tens of millions of
resolved entities
◑
Pitney
Bowes
● ◑ ● Not available
●
QuantaVerse ● ● ● Not available

●
20
Vendor Investigative Global data Integrated Entity resolution/link Open

search privacy platform analysis scalability standards
compliance
Quantexa ● ● ● 50 billion records
●
Quantiply ● ● ● 200 million entity records

●
SAS ● ● ○ Not available

○
Simility ● ◑ ● 30 billion records

○
Legend: ● = Fully addresses key functionality, ◕ = Mostly addresses key functionality, ◑ = Partially addresses key functionality, ◔ =
Addresses a few points of key functionality, ○ = Does not address key functionality.
A R AC H N YS
Arachnys helps firms build risk intelligence about their customer to streamline customer
onboarding, KYC, CDD, and AML investigation processes. The following discusses the ways in
which the firm enables clients to address their entity resolution, dynamic segmentation, and link
analysis challenges:
• Automated ETL validation: Arachnys’ solution can accept structured, unstructured,

and semistructured input data; validates data fields upon import; identifies
problems; and provides a UI to enable end users at the client to work and resolve
issues.
• Entity resolution: Arachnys’ platform facilitates data standardization and external

data enrichment to facilitate a single customer view. The entity-matching logic can
be dynamically adjusted by the client, but end users do not currently have the ability
to drill down into entities to examine the matching, nor does the system presently
ingest match keys from MDM systems.
• Dynamic segmentation: Arachnys can enable data clustering but does not currently
have a dynamic ability to recategorize entities, nor can the segmentation
incorporate inputs from network link analysis.
• Network link analysis: Arachnys does not currently provide a network link analysis
solution.
• Custom modeling: Arachnys does not currently provide custom modeling.
• Investigative search: Investigators are able to search across the breadth of customer
and transactional data ingested by the platform.
• Global data privacy compliance: Arachnys provides a field-level ability to restrict or

enable access to customer data to allow its clients to comply with local data privacy
requirements.
21
• Integrated platform: The Arachnys solution is provided as an integrated platform.
• Open standards: While Arachnys does support API interactions with its partners, the
system does not currently provide API access to its resolved entities to other internal
client systems.
AYA SD I
Developed by Stanford mathematicians, Ayasdi combines machine-learning algorithms,
computational power, and topological summaries to convert data into actionable business value.
In-market use cases include AML, credit risk, and asset liability management. The following
discusses the ways in which the firm enables clients to address their entity resolution, dynamic
segmentation, and link analysis challenges:
• Automated ETL validation: Ayasdi can support structured, unstructured, and

semistructured data inputs; validate data fields on import; and surface issues. It
does not currently provide a UI for end users to resolve the issues; this happens
outside the platform as a custom extension.
• Entity resolution: Ayasdi has a partnership with Senzing to enable its entity
resolution capabilities. This arrangement is transparent to the client. There is just
one integration and one contract required to benefit from the combined services.
Senzing’s entity resolution solution meets the full array of functionality discussed in
Table C.
• Dynamic segmentation: Ayasdi has a robust dynamic segmentation capability that

combines clustering algorithms with topological data analysis to address all of the
key functionality identified in Table D.
• Network link analysis: Ayasdi has a partnership with Senzing to enable its network
link analysis capabilities. This arrangement is transparent to the client. There is just
one integration and one contract required to benefit from the combined services.
Senzing software meets the functionality for real-time network building and the
ability to incorporate network link analysis into detection routines discussed in Table
E, as well as some of the functionality for data lineage and evidence.
• Custom modeling: Ayasdi supports all of the key custom modeling capabilities
discussed in Table F.
• Investigative search: Investigators can search across the breadth of customer and
transactional data ingested by the platform.
• Global data privacy compliance: Ayasdi’s system provides a field-level ability to

restrict or enable access to customer data to allow its clients to comply with local
data privacy requirements.
• Integrated platform: Ayasdi provides an integrated platform for entity resolution,

dynamic segmentation, and custom modeling.
22
• Open standards: Ayasdi’s platform provides API access to all its native capabilities,
and a separate API provides access to the resolved entities and linked networks that
Senzing facilitates.
BA E SY ST E MS
BAE Systems is a British defense and security company. Its NetReveal product suite provides
clients in 90 countries with solutions in the areas of fraud, AML, and cybersecurity. BAE Systems’
target market for its financial crimes product suite includes Tier-1 and Tier-2 FIs. In-market use
cases for its entity resolution and network link analysis capabilities include AML and fraud. The
following discusses the ways in which the firm enables clients to address their entity resolution
and link analysis challenges:
• Automated ETL validation: NetReveal can support structured, unstructured, and

outside the platform.
• Entity resolution: BAE Systems’ platform facilitates data standardization and

external data enrichment to help create a single customer view. The resolved data
are used by the solution’s own analytics; the entities are not exposed to other
systems. End users can always see which data records resolve into an entity in social
networking analytics and can configure relevant data fields to be displayed so that
the linking logic is transparent. However, the UI is not designed to make the pre-
computed entity resolution processing steps explicit.
• Dynamic segmentation: NetReveal can support dynamic segmentation in specific

use case modules, such as unauthorized trading.
• Network link analysis: NetReveal supports all of the key network link analysis
functionality defined in Table E, except for real-time network building.
• Custom modeling: BAE Systems’ Advanced Analytics Platform provides clients with
all key custom modeling capabilities listed in Table F.
• Global data privacy compliance: NetReveal provides a field-level ability to restrict or

enable access to customer data to allow BAE Systems’ clients to comply with local
data privacy requirements. The link analysis visualizer provides the ability to restrict
access so that when investigators interact with entities and networks, they are only
able to view data based on the user’s privileges, although the approach to data
masking does reveal that there is sensitive data that has been omitted from the
display.
• Integrated platform: BAE Systems’ network link analysis and custom modeling
capabilities are provided as separate, but tightly integrated, product offerings.
23
• Open standards: NetReveal does not currently provide API access to its resolved
entities or linked networks to other internal client systems.
DATAV IS O R
DataVisor’s mission is to leverage digital intelligence to protect and restore trust online. It helps
banks and e-commerce firms in the U.S., Asia, and other regions to protect them from a wide
array of attacks (including fraud, abuse, and money laundering) using a combination of machine-
learning analytics and DataVisor’s proprietary Global Intelligence Network. The following
discusses the ways in which the firm enables clients to address their entity resolution, dynamic
segmentation, and link analysis challenges:
• Automated ETL validation: DataVisor’s DCube solution can accept structured,

unstructured, and semistructured input data; validates data fields upon import; and
identifies problems. The solution offers the ability to highlight and review issues
associated with data quality and formatting, and enables customers to create
customized functions to correct problematic data. For example, if an IP address has
an extra quotation, DCube can create a string operation to remove it. The solution
does not currently provide a UI to enable end users at the client to work and resolve
issues on a one-off basis.
• Entity resolution: DCube facilitates data standardization and external data

enrichment to help create a single customer view. It provides users with the control
to merge data from different sources and review the entities and their
corresponding data, and allows customers to tag different fields that define an
entity. Users can access the entities via a UI and drill into them to determine how
different data records are resolved.
• Dynamic segmentation: DCube uses clustering and graph algorithms to segment

customer behavior. The system can support all key capabilities listed in Table D.
• Network link analysis: DCube can support all functionality listed in Table E. It can
also show the evolution of each network and break them into active and dormant
networks to expose hidden risks.
• Custom modeling: DCube provides clients with all key capabilities listed in Table F.
transactional data ingested by DCube.
• Global data privacy compliance: The DCube system provides a field-level ability to
data privacy requirements. It also provides the ability to restrict access so that when
investigators interact with entities and networks they are only able to view data
based on the user’s privileges so they cannot infer the presence of sensitive data.
• Integrated platform: DCube provides all of the functionality discussed above as part
of an integrated platform.
24
• Open standards: DataVisor does not currently enable other client systems to access
its resolved entities or linked networks via API; while the platform is technically
capable of this, DataVisor’s clients have not yet requested this functionality, so the
capability has not yet been surfaced for end users.
F EAT UR ES PAC E
The technology behind Featurespace’s adaptive behavioral analytics technology was created at
Cambridge University in the late 2000s. Since that time, Featurespace’s Aric platform has helped
FIs, processors, and gaming firms worldwide with their fraud and money laundering issues. The
following discusses the ways in which the firm enables clients to address their entity resolution
• Automated ETL validation: Featurespace can support structured, unstructured, and

semistructured data; validate data fields on import; and surface issues. It does not
currently provide a UI for end users to resolve the issues; this happens outside the
platform.
• Entity resolution: Featurespace’s platform facilitates data standardization and

external data enrichment to help create a single customer view. The resolved data is
used by Featurespace’s own analytics, and the platform provides the ability to
export entity-level data for use by other systems. End users are not able to drill
down into entities to determine how different data records are resolved into the
same entity.
• Dynamic segmentation: Aric uses clustering algorithms to segment customer

behavior. The system can support all key capabilities listed in Table D.
• Network link analysis: Aric can support all key capabilities listed in Table E.
• Custom modeling: Aric provides clients with most of the key capabilities listed in
Table F, with the exception of native modeling-building capabilities.
• Global data privacy compliance: Aric provides a field-level ability to restrict or

enable access to customer data to allow Featurespace’s clients to comply with local
data privacy requirements, and provides the ability to configure the fields that are
shown in networks to ensure that sensitive data is restricted.
• Integrated platform: Featurespace provides ETL, entity resolution, dynamic

segmentation, link analysis, and custom modeling as part of an integrated platform.
• Open standards: Aric does not currently provide API access to its resolved entities or
linked networks; however, the data can be exported out of the system in an
automated manner to expose it to other client systems.
25
F E E DZA I
Feedzai was founded by data scientists and aerospace engineers with the mission of making
banking and commerce safe. The world’s largest banks, payment providers, and retailers use
Feedzai’s machine-learning technology to manage the risks associated with banking and
shopping, whether it’s in person, online, or via mobile devices. The following discusses the ways
in which the firm enables clients to address their entity resolution, dynamic segmentation, and
link analysis challenges:
• Automated ETL validation: Feedzai can support structured, unstructured, and

semistructured data inputs; validate data fields on import; and surface issues.
Feedzai provides a UI that allows the user to perform data preparation tasks such as
understanding data quality, handling null values (e.g., performing value imputation),
removing duplicates, joining datasets, identifying and correcting invalid values (e.g.,
negative transaction amounts), and other complex data transformations.
Additionally, Feedzai provides an integration with JupyterLab to provide extensibility
to open-source tools to augment data cleaning and transformation.
• Entity resolution: Feedzai’s platform facilitates data standardization, entity

resolution, and external data enrichment for all entities within the platform. Hyper-
granular profiles of customer behavior, incorporation of reference data from MDM
or other sources, external enrichment, and record linkage (including linkage across
the Feedzai client base, powered by Feedzai Risk Ledger) all contribute to creating a
single customer view. The resolved data is available both in real time when
processing transactions or other events, and in a batch context for data science
discovery. Further, this data is used by Feedzai’s own analytics and products such as
Case Manager and Feedzai Genome. The entities are available with the Feedzai
system but are not exposed to other systems, nor are end users able to drill into
entities to determine how different data records are resolved into the same entity
outside the Feedzai platform.
• Dynamic segmentation: Using Feedzai Genome’s capabilities, fraud analysts can

group data together into connected components and clusters to allow exploration of
possible suspicious entities and hidden linkages. As new data arrives, the Genome
system automatically relinks data and provides a dynamic view of the underlying
data to the analyst. The linkages between the different entities will create different
shapes called Genometries. The more complex the shape, the more suspicious it is.
Feedzai Genometries is a new concept that Feedzai has been exploring in which
transactions are analyzed in groups instead of one by one, and emerging patterns of
fraud are dynamically segmented according to previously known Genometries.
• Network link analysis: Feedzai’s platform provides clients with all of the key
capabilities listed in Table E.
• Custom modeling: Feedzai’s platform provides clients with all of the key capabilities
listed in Table F.
• Investigative search: Investigators are able to search across the breadth of customer,
partner, and transactional data ingested by the platform.
26
• Global data privacy compliance: Feedzai’s platform provides a field-level ability to

data privacy requirements. The solution does not currently provide the ability to
restrict access so that when investigators interact with entities and networks, they
are only able to view data based on the user’s privileges, so they cannot infer the
presence of sensitive data.
• Integrated platform: Feedzai provides ETL, entity resolution, dynamic segmentation,

link analysis, and custom modeling as part of an integrated platform.
• Open standards: Feedzai’s platform does not currently provide API access to its
resolved entities or linked networks.
F ICO
FICO is a leading analytics software company and the pioneer of neural network technology. It
helps businesses in more than 80 countries make better decisions that drive higher levels of
growth, profitability, and customer satisfaction. FICO provides analytics software and tools used
across multiple industries to manage risk, fight fraud, build more profitable customer
relationships, optimize operations, and meet government regulations. The following discusses
the ways in which the firm enables clients to address their entity resolution and link analysis
challenges:
• Automated ETL validation: FICO can support structured, unstructured, and

• Entity resolution: FICO’s Identity Resolution Engine (IRE) can support all key
capabilities list in Table C.
• Dynamic segmentation: IRE clusters entities using patented measures and its
conditional clustering algorithms. IRE supports all the key capabilities listed in Table
D.
• Network link analysis: IRE, Falcon, and Application Fraud Manager can support all of
the requirements listed in Table E, as will Falcon X, slated for release in summer
2019.
• Custom modeling: IRE provides APIs that can either call a model or provide variables
to a model in real time. FICO’s Falcon can enable all of the key capabilities listed in
Table F.
and transactional data ingested via a case management layer.
• Global data privacy compliance: FICO’s case management system provides a field-
level ability to restrict or enable access to customer data to allow its clients to
comply with local data privacy requirements. The solution does not currently
27
provide the ability to restrict access so that when investigators interact with entities
and networks they are only able to view data based on the user’s privileges so they
cannot infer the presence of sensitive data.
• Integrated platform: FICO’s product set can address many of the key capabilities
identified, but separate integrations are required across the ETL, network link
analysis, and custom modeling.
• Open standards: FICO’s platform does not currently provide API access to its
resolved entities or linked networks.
IBM
IBM is a leading cloud platform and cognitive solutions company. It brings a suite of solutions to
businesses to help with their financial crime challenges, including IBM Entity Analytics, IBM Safer
Payments, IBM i2, and IBM Financial Crimes Insight with Watson. The following discusses the
ways in which the firm enables clients to address their entity resolution, dynamic segmentation,
• Automated ETL validation: IBM’s Financial Crimes Insights for Watson has
embedded IBM’s InfoSphere DataStage product to support ETL for large data
volumes. It accepts structured, unstructured, and semistructured input data;
validates data fields upon import; identifies problems; and provides a UI to enable
end users to analyze and resolve issues.
• Entity resolution: IBM’s Entity Analytics solution can support all key capabilities
listed in Table C.
• Dynamic segmentation: IBM’s Financial Crimes Insights for Watson solution can
support the key capabilities listed in Table D.
• Network link analysis: IBM’s i2 solution enables all key capabilities listed in Table E.
• Custom modeling: IBM Financial Crimes Insights for Watson and IBM Safer
Payments solutions can enable all key capabilities listed in Table F.
• Investigative search: Financial Crimes Insight with Watson can be integrated with
IBM Entity Analytics and IBM i2 to facilitate the ability to search across the breadth
of the customer and transactional data loaded into the systems.
• Global data privacy compliance: IBM Financial Crimes Insight with Watson can
provide a field-level ability to restrict or enable access to customer data to allow its
clients to comply with local data privacy requirements. The IBM i2 solution provides
the ability to restrict access so that when investigators interact with entities and
networks, they are only able to view data based on the user’s privileges, so they
• Integrated platform: IBM’s product set can address most of the key capabilities
identified within this report, but separate integrations may be required. Solutions
28
built on the IBM Financial Crimes Insight platform are built to be interoperable and
share a common UI.
• Open standards: IBM Financial Crimes Insight with Watson was built on open
standards and enables API access to its resolved entities and linked networks to
other client systems.
N IC E AC T I MIZ E
Nice Actimize is one of the leading providers of financial crime solutions; all of the global top 10
banks and more than 400 FIs around the world use Nice Actimize solutions. The company
provides real-time, cross-channel fraud prevention, AML detection, and trading surveillance
solutions that address concerns such as payment fraud, cybercrime, sanctions monitoring,
market abuse, customer due diligence, employee fraud, and insider trading. The following
discusses the ways in which the firm enables clients to address their entity resolution and link
analysis challenges:
• Automated ETL validation: Nice Actimize can support structured, unstructured, and
does not currently provide a UI for end users to resolve the issues. This happens
• Entity resolution: Nice Actimize’s platform facilitates data standardization and

external data enrichment to help create a single customer view. The resolved data is
used by the solution’s own analytics, the entities are not exposed to other systems.
The system provides an interface for users to see the incoming entity, existing entity
and merged/resolved entity.
• Dynamic segmentation: Nice Actimize’s Autonomous Financial Crime Platform can

support the elements of dynamic segmentation functionality outlined in Table D.
• Network link analysis: Nice Actimize’s network link analysis enables all key
capabilities listed in Table E.
• Custom modeling: Nice Actimize’s IFM-X platform can enable all key capabilities
listed in Table F.
transactional data ingested by the various platforms using Nice Actimize’s case
management layer.
• Global data privacy compliance: Nice Actimize’s case management layer provides a
field-level ability to restrict/enable access to customer data to allow its clients to
comply with local data privacy requirements. The link analysis solution does not
currently provide the ability to restrict access so that when investigators interact
with entities and networks, they are only able to view data based on the user’s
privileges, so they cannot infer the presence of sensitive data.
29
• Integrated platform: Nice Actimize’s product suite can address most of the key
capabilities identified within this report, but separate product integrations are
required, unless the client is using the NICE Actimize investigations layer, all of the
solutions are integrated into that platform.
• Open standards: If the client is using Nice Actimize’s Case Manager, then all entities
and linked networks are available via its API library.
P IT N E Y B OW ES
Pitney Bowes is a global technology company providing data and commerce solutions that
power billions of transactions. Its Spectrum solutions help FIs around the globe with entity
resolution, data enrichment, link analysis, and sanctions screening. The following discusses the
ways in which the firm enables clients to address their entity resolution and link analysis
challenges:
• Automated ETL validation: Pitney Bowes’ solution can accept structured,

unstructured, and semistructured input data; validates data fields upon import; and
identifies problems. The solution does not currently provide a UI to enable end users
at the client to work and resolve issues.
• Entity resolution: Pitney Bowes’ entity resolution capabilities include data

standardization and external data enrichment to help inform the single customer
view. End users at FIs can drill down into an entity and see exactly how and why
different data records were matched to be the same entity. If desired, the client can
bring in match keys from external MDM systems to help augment the entity
resolution. The resolved entities can be accessed in batch or real time, and the
resolution matching logic can be dynamically adjusted by end users with appropriate
permissions.
• Dynamic segmentation: Pitney Bowes’ Spectrum Data Science module enables

dynamic segmentation for its clients.
• Network link analysis: Pitney Bowes’ link analysis can support all functionality listed
in Table E.
• Custom modeling: Pitney Bowes supplies machine-learning analytics as part of its

sanction screening solution, although these are not customized at the client level.
The firm can also support the import of external models. It does not currently offer a
native model-building capability.
• Global data privacy compliance: Pitney Bowes’ system provides a field-level ability
to restrict or enable access to customer data to allow its clients to comply with local
data privacy requirements. Pitney Bowes’ solution does not currently provide the
ability to restrict access so that when investigators interact with entities and
30
networks, they are only able to view data based on the user’s privileges so they
• Integrated platform: Pitney Bowes provides the key functionality discussed above as
part of an integrated platform.
• Open standards: Pitney Bowes’ platform enables API access to its resolved entities
and linked networks to other client systems.
Q UA N TAV E R SE
QuantaVerse’s financial crime platform uses proprietary artificial intelligence and machine-
learning algorithms to examine entity and transactional data sets, understand patterns, and
identify aberrations that are indicative of financial crimes. The firm’s solutions help clients
reduce risk by uncovering previously unidentified instances of money laundering, lower the cost
associated with investigating false positives, and automate investigation processes for more
efficient decision-making and reporting. The following discusses the ways in which the firm
enables clients to address their entity resolution, dynamic segmentation, and link analysis
challenges:
• Automated ETL validation: QuantaVerse’s solutions can accept structured,

unstructured, and semistructured input data; validate data fields upon import; and
identify problems. QuantaVerse provides a web app that shows by entity all data
that was resolved into that entity. Depending on how the client wants it to perform,
the platform provides an option to deselect data records from the entity resolution.
The solution does not currently enable FIs to cleanse their data, as that happens
outside of the platform. QuantaVerse does, however, work with its customers to
understand data, formats, and relationships, then encodes that information in
scripts to make needed transformations.
• Entity resolution: QuantaVerse facilitates data standardization and external data

enrichment to help create a single customer view. The resolved data is available in
real time and batch, provides full transparency, and can coexist with MDM systems.
Dynamic adjustment of matching logic is not available to end users—different fuzzy
matching for different customer risk levels is set up during implementation and
requires vendor involvement to adjust over time.
• Dynamic segmentation: QuantaVerse’s dynamic segmentation capabilities include

all of the key functionality identified in Table D.
• Network link analysis: QuantaVerse’s solution fulfills all the key functionality
identified in Table E.
• Custom modeling: QuantaVerse provides its clients with models that leverage both
supervised and unsupervised techniques. The model output is transparent and
explainable; the firm follows the OCC 2011-12 model validation procedures.
Technically, the platform has the ability to deploy externally created models, though
31
it has not yet been asked to do so by a client. The platform does not include a native
model-building capability.
• Global data privacy compliance: QuantaVerse’s system provides a field-level ability

to restrict or enable access to customer data to allow its clients to comply with local
investigators interact with entities and networks they are only able to view data
based on the user’s privileges, so they cannot infer the presence of sensitive data.
• Integrated platform: QuantaVerse provides ETL, entity resolution, dynamic

• Open standards: QuantaVerse’s platform enables access to its resolved entities,

dynamic segmentations, and linked networks using open standards to other client
systems.
Q UA N T E XA
Quantexa empowers organizations to drive better decisions from their data. Using the latest
advancements in big data and artificial intelligence, Quantexa uncovers hidden customer
connections and behaviors to solve major challenges in financial crime, customer insight, and
data analytics. The following discusses the specific ways in which the firm enables clients to
address their entity resolution, dynamic segmentation, and link analysis challenges:
• Automated ETL validation: Quantexa’s solution can accept structured, unstructured,

and semistructured input data; validates data fields upon import; identifies
problems; and provides a UI to enable end users at the client to work and resolve
issues.
• Entity resolution: Quantexa’s entity resolution capabilities include data

standardization and external data enrichment to help inform the single customer
view. End users at FIs can drill down into an entity and see how and why different
data records were matched to be the same entity. If desired, the client can bring in
match keys from external MDM systems to help augment the entity resolution. The
resolved entities can be accessed in batch or real time, and the resolution matching
logic can be dynamically adjusted by end users with appropriate permissions.
• Dynamic segmentation: Quantexa’s dynamic segmentation capabilities include all of

the key functionality identified in Table D.
• Network link analysis: Quantexa’s solution fulfills all the key criteria identified in
Table E.
• Custom modeling: Quantexa provides a number of analytical models to its clients.

Models available currently, many of which have been reviewed and accepted by
regulators, include capital markets AML (including FX, equities, and precious metals),
32
financial intelligence unit post-alert scoring and false-positive reduction, trade

finance AML, KYC scoring, low prices securities AML detection, trade finance fraud,
mule account detection, and application fraud. The team also provides custom
modeling services and skills transfer. The platform enables clients to import external
detection models or use their own preferred analytical environments such as
KNIME, R, or Python. The modeling approach facilitates transparency and
explainability, and can run in batch or real time. The platform does not currently
enable native model-building capability.
• Global data privacy compliance: Quantexa’s system provides a field-level ability to

investigators interact with entities and networks, they are only able to view data
• Integrated platform: Quantexa provides ETL, entity resolution, dynamic

• Open standards: Quantexa’s platform enables access to its resolved entities,

dynamic segmentations, and linked networks using open standards to other client
systems.
Q UA N T IP LY
Quantiply’s Sensemaker helps FIs fight financial crime by delivering a suite of automated,
artificial intelligence-powered risk and compliance software to address KYC and AML needs.
Quantiply enables FIs to harness their data and identify suspicious actors, interactions, and
activities to better address financial crime. The following discusses the ways in which the firm
enables clients to address their entity resolution, dynamic segmentation, and link analysis
challenges:
• Automated ETL validation: Quantiply’s solution can support feature learning from
structured, unstructured, and semistructured data; validates fields on import; and
identifies problems. It also provides a UI to enable end users to resolve data issues.
• Entity resolution: Quantiply can address most of the criteria in Table C. While it does
not bring in standardized global address-resolution routines, it does apply machine-
learning algorithms to help harmonize address fields. The system also enables
external data enrichment to augment and facilitate a single customer view. End
users can drill down into an entity and see exactly how and why different data
records were matched to be the same entity. If desired, the client can bring in match
keys from external MDM systems to help augment the entity resolution. The
resolved entities can be accessed in batch or real time, and the resolution-matching
33
• Dynamic segmentation: Quantiply’s platform uses graph analytics to facilitate

clustering and dynamic segmentation. The solution meets all of the criteria in Table
D and features the ability to present a time series to show how a customer’s
behavior has evolved over time.
• Network link analysis: Quantiply’s solution fulfills all of the key criteria identified in
Table E.
• Custom modeling: Quantiply’s solution is based primarily on unsupervised, transfer

learning, and semisupervised analytics. The solution enables native model building
for compliance and regulatory use cases, and it can support the import of externally
developed models. The models operate in both batch and real time, and meet FIs’
needs for transparency and explainability.
and transactional data ingested by Sensemaker utilizing a Google-like search
interface to scan through structured and unstructured internal and external data
sources.
• Global data privacy compliance: Quantiply’s system provides a field-level ability to

• Integrated platform: Quantiply’s Sensemaker provides ETL, entity resolution,

dynamic segmentation, link analysis, and custom modeling as part of an integrated
platform.
• Open standards: Quantiply’s platform enables API access to its resolved entities,
dynamic segmentations, and linked networks to other client systems.
SA S
A longstanding leader in risk analytics, SAS was founded in 1976 and remains privately held,
serving FIs, corporations, and government entities in 145 countries. SAS’ financial crimes
solutions use advanced data analytics to monitor payments, nonmonetary transactions, and
events, enabling businesses to identify and respond to unwanted and suspicious behavior in real
time. The following discusses the ways in which the firm enables clients to address their entity
resolution and link analysis challenges:
• Automated ETL validation: SAS’ solution can accept structured, unstructured, and
semistructured input data; validates data fields upon import; identifies problems;
and provides a UI to enable end users at the client to work and resolve issues.
• Entity resolution: SAS’ entity resolution capabilities include data standardization and
external data enrichment to help inform the single customer view. End users at FIs
can drill down into an entity and see exactly how and why different data records
34
were matched to be the same entity. If desired, the client can bring in match keys
from external MDM systems to help augment the entity resolution. The resolved
entities can be accessed in batch or real time, and the resolution-matching logic can
be dynamically adjusted by end users with appropriate permissions.
• Dynamic segmentation: SAS’ financial crimes platform includes a dynamic

segmentation capability that addresses all of the key functionality identified in Table
D.
• Network link analysis: SAS’ network link analysis solution fulfills all of the key
functionality identified in Table E.
• Custom modeling: SAS can enable all of the key capabilities listed in Table F.
• Global data privacy compliance: SAS’ system provides a field-level ability to restrict
or enable access to customer data to allow its clients to comply with local data
privacy requirements. It also provides the ability to restrict access so that when
• Integrated platform: SAS’ product set can address many of the key market needs
identified in this report, but separate SAS product integrations are required to
address the breadth of the ETL, entity resolution, dynamic segmentation, network
link analysis, and custom modeling capabilities.
• Open standards: SAS’ solution does not currently enable access to its resolved
entities, dynamic segmentations, or linked networks to other client systems.
S I MI L IT Y
Simility, a PayPal service, helps businesses orchestrate decisions to reduce friction, improve
trust, and solve complex fraud and AML problems by combining machine-learning and big-data
analytics. Simility’s offerings are underpinned by its Adaptive Decisioning Platform, built with a
data-first approach, to help businesses harness their data and better assess transactional risk.
The following discusses the ways in which the firm enables clients to address their entity
resolution and link analysis challenges:
• Automated ETL validation: Simility’s solution can support structured, unstructured,

and semistructured data; validates fields on import; and identifies problems. It does
not currently provide a UI to enable end users to resolve data syntax issues, but the
UI does have the ability to write rules to determine how the models handle bad
data.
• Entity resolution: Simility’s entity resolution capability is enabled with proprietary

graph database technology and includes data standardization and external data
enrichment to help inform the single customer view. End users at FIs can’t currently
35
drill down into an entity and see exactly how and why different data records were
matched to be the same entity. While the de-resolution capability exists within the
system, this is not currently surfaced for end users. Clients have the ability to bring
in match keys from external MDM systems to help augment the entity resolution.
Resolved entities can be accessed in batch or real time, and the resolution-matching
• Dynamic segmentation: Simility’s platform includes a dynamic segmentation

capability that addresses all of the key functionality identified in Table D.
• Network link analysis: Simility’s solution fulfills all of the key functionality identified
in Table E.
• Custom modeling: Simility can enable all of the key capabilities listed in Table F.
• Global data privacy compliance: Simility’s system provides a field-level ability to

data privacy requirements. Simility’s solution does not currently provide the ability
to restrict access so that when investigators interact with entities and networks, they
are only able to view data based on the user’s privileges so they cannot infer the
presence of sensitive data.
• Integrated platform: Simility provides ETL, entity resolution, dynamic segmentation,

link analysis, and custom modeling as part of an integrated platform.
• Open standards: Simility’s solution does not currently enable access to its resolved
entities or linked networks to other client systems.
36
CONCLUSION
Money laundering and fraud attacks will only continue to escalate for the foreseeable future,
while at the same time innovation in financial services increases the attack surface. Customer
data represents an invaluable asset to banks, but only when technology is applied that can help
get rid of the noise and bring hidden insights to the surface. Here are a few recommendations
for banks as they are evaluating their investments in this space:
• Rip and replace is not always the optimal path. Ripping out an existing solution and
replacing it with something new is time-consuming and expensive. Many solutions
can be implemented side by side or on top of existing investments to augment
detection and efficiency.
• Clearly define your current and future needs. Map out both near- and long-term
use cases for the platform, ensure you also have a clear picture of your firm’s
specific pain points, then map those needs to the vendors’ individual strengths and
weaknesses.
• Bring regulators on the journey with you. Many regulators are now actively
encouraging the use of more advanced technology. As you engage with these new
technologies, keep an open line of communication with your regulator.
37
RELATED AITE GROUP RESEARCH
AIM Evaluation: Fraud and AML Machine Learning Platform Vendors, March 2019.
The AML of Tomorrow: Here Today, July 2018.
Machine Learning: Fraud Is Now a Competitive Issue, October 2017.
Machine Learning for Fraud Mitigation: The Substance Behind the Buzz, April 2017.
38
ABOUT AITE GROUP

Aite Group is a global research and advisory firm delivering comprehensive, actionable advice on
business, technology, and regulatory issues and their impact on the financial services industry.
With expertise in banking, payments, insurance, wealth management, and the capital markets,
we guide financial institutions, technology providers, and consulting firms worldwide. We
partner with our clients, revealing their blind spots and delivering insights to make their
businesses smarter and stronger. Visit us on the web and connect with us on Twitter and
LinkedIn.
AUT H O R I N FO R MAT IO N
Julie Conroy
+1.617.398.5045
jconroy@aitegroup.com
C O N TAC T
For more information on research and consulting services, please contact:
Aite Group Sales

+1.617.338.6050
sales@aitegroup.com
For all press and conference inquiries, please contact:
Aite Group PR
+1.617.398.5048
pr@aitegroup.com
For all other inquiries, please contact:
info@aitegroup.com
39

Entity-Resolution Report Quantexa

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Entity-Resolution Report Quantexa

Uploaded by

Copyright:

Available Formats

Entity Resolution and Linking: Enabling

Next-Generation Financial Crime Detection

Complimentary access to this Aite Group report is provided by:

• Critical components of the next-generation approach to financial crime mitigation

• Regulatory requirements for financial firms’ ability to detect money laundering

• Innovation in financial services is creating an ever-growing attack surface. Faster

Table A: The Market

Source: Aite Group

CUSTOMER DATA: THE D IAMOND IN THE ROUGH

Figure 1: ETL UI Surfacing Exceptions

Table B: Key ETL Functionality

Source: Aite Group

Table C: Key Entity Resolution Functionality

Dynamic During investigations, a frequent requirement is to be able to dynamically adjust

Coexistence Many organizations will have an MDM capability designed to provide an

Source: Aite Group

Dynamic segmentation uses machine-learning-based clustering and/or graph analytics to analyze

Figure 2: Example of Dynamic Segmentation Technology

Table D: Key Dynamic Segmentation Functionality

Source: Aite Group

Figure 3: Example of Network Link Analysis

Table E: Key Network Link Analysis Functionality

Source: Aite Group

Table F: Key Custom Modeling Functionality

Multiple methods Models should be able to leverage multiple libraries and

Source: Aite Group

• Integrated platform: Some vendors provide the key functionality previously

Ayasdi Menlo Park, California 2008 89

BAE Systems London 1999 83,500

DataVisor Mountain View, California 2013 130

Featurespace Cambridge, U.K. 2008 200

Feedzai San Mateo, California 2009 394

FICO San Jose, California 1956 3,800

IBM Armonk, New York 1911 366,600

Nice Actimize Hoboken, New Jersey 1999 1,150

Pitney Bowes Stamford, Connecticut 1920 14,700

QuantaVerse Wayne, Pennsylvania 2014 27

Quantexa London 2016 160

Quantiply San Jose, California 2013 30

SAS Cary, North Carolina 1976 14,151

Simility Palo Alto, California 2014 80

Source: Aite Group, vendors

BAE Systems ● ◕ ◑ 7 billion records monthly

DataVisor ● ● ● More than 1 billion

Featurespace ● ◑ ● 750 million resolved

● ◑ ● Feedzai supports 150

FICO ● ● ○ 500 million records

IBM ● ● ◔ Not available

QuantaVerse ● ● ● Not available

Vendor Investigative Global data Integrated Entity resolution/link Open

Quantiply ● ● ● 200 million entity records

SAS ● ● ○ Not available

Simility ● ◑ ● 30 billion records

• Automated ETL validation: Arachnys’ solution can accept structured, unstructured,

• Entity resolution: Arachnys’ platform facilitates data standardization and external

• Custom modeling: Arachnys does not currently provide custom modeling.

• Global data privacy compliance: Arachnys provides a field-level ability to restrict or

• Integrated platform: The Arachnys solution is provided as an integrated platform.

• Automated ETL validation: Ayasdi can support structured, unstructured, and

• Dynamic segmentation: Ayasdi has a robust dynamic segmentation capability that

• Global data privacy compliance: Ayasdi’s system provides a field-level ability to

• Integrated platform: Ayasdi provides an integrated platform for entity resolution,

• Automated ETL validation: NetReveal can support structured, unstructured, and