Payment identity network iPiD has partnered with Microsoft to develop an AI-powered name-matching tool for Verification of Payee (VoP).
Name matching has been a fundamental aspect of payment security and regulatory compliance. Financial institutions must ensure accuracy to prevent processing payments to sanctioned entities. New European regulations, set to take effect in October, introduce additional complexity to VoP, requiring financial firms to verify that the payer’s name matches the name registered to the recipient’s bank account to combat payment scams.
Financial institutions must categorize name matches into three groups before processing a payment: match, partial match, or no match. Partial matches, which may involve minor discrepancies like spelling errors or alternate naming conventions that still point to the correct payee, can create challenges for banks. While these partial matches can enhance customer experience, they also raise GDPR concerns about unintentionally revealing incorrect payee information.
To tackle these challenges, iPiD has utilized the Microsoft Azure OpenAI Service to create a name matching algorithm that addresses the intricate requirements of VoP. The company asserts that this solution balances precision and compliance with speed and efficiency, minimizing false negatives while adhering to stringent data privacy standards.
Ivan Chong, CTO of iPiD, commented, “Names are more than just letters; they carry identity and meaning. With AI, we can bridge the gap between technical precision and contextual nuance. Thanks to our collaboration with Microsoft, we’ve developed a solution that combines the linguistic depth of large language models with essential requirements like speed, resource efficiency, explainability, and adaptability.”