Entity resolution
Also called record linkage, entity matching, identity resolution
Entity resolution is the process of working out which records across different systems describe the same real person or company. It links accounts, customer files, payments and external data into one profile. Banks use it so that monitoring, screening and risk scoring look at the whole customer, not scattered fragments.
How it works
A bank holds the same customer in many places: core banking, cards, trade finance and payment messages. Entity resolution compares names, dates of birth, addresses, identifiers and relationships, then scores how likely two records are to be one entity. Strong matches merge into a single profile. Borderline matches go to an analyst. The output feeds transaction monitoring, sanctions screening and network analysis.
Criminals rely on fragmentation. Slight spelling changes, new addresses and multiple companies make one actor look like several unconnected customers. Without resolution, alerts fire on isolated pieces and miss the full pattern. Good resolution also cuts false positives, because a confirmed identity can be cleared once rather than reviewed repeatedly. Supervisors expect firms to know who their customers are and to aggregate risk data accurately.
The rules
Requires banks to aggregate risk data accurately and completely, with consistent identifiers and data taxonomies across the group.
Global systemically important banks, and domestic systemically important banks at supervisors' discretionRequires covered firms to identify and verify the beneficial owners of legal entity customers at account opening.
US banks, broker-dealers, mutual funds and futures firmsRequires firms to identify customers and beneficial owners and to conduct ongoing due diligence on the business relationship.
Financial institutions in FATF member jurisdictions, through national lawCommon questions
How is entity resolution different from fuzzy matching?
Fuzzy matching compares two strings and scores their similarity. Entity resolution uses many attributes and relationships, including identifiers, addresses and links between parties, to decide whether records belong to one real entity. Fuzzy matching is usually one input into a wider resolution process.
Why does entity resolution matter for transaction monitoring?
Monitoring rules work on the activity of a customer. If one person is split across several unlinked records, their total flows and connections stay hidden. Resolution brings those records together so scenarios and analysts see the full activity and the network around it.
Does entity resolution reduce false positives?
It often does. When a screened name is already resolved to a verified customer with known identifiers, repeat alerts on the same person can be cleared faster. Better matching also stops unrelated people with similar names from being linked to a risky profile.
Is entity resolution required by regulation?
No rule names entity resolution directly. Regulators require customer due diligence, beneficial ownership identification and accurate risk data aggregation. Firms use entity resolution as a method to meet those requirements across large and fragmented data estates.
