iPiD has announced the launch of iPiD Match, an advanced name matching solution for beneficiary verification developed in collaboration with Microsoft.
This tool, powered by Microsoft Azure OpenAI Service, aims to address the challenges of name matching and ensure compliance with the European Verification of Payee (VoP) requirements starting from October 2025.
Name matching is crucial for payment security and regulatory compliance, particularly in preventing payments to sanctioned entities. The new VoP regulation requires financial institutions to verify that the name of the payer matches the name of the beneficiary's bank account to combat fraud. Before processing a payment, institutions must classify the name match into three categories:
- Exact Match: The names are identical.
- Partial Match: High similarity with suggested modifications.
- No Match: No association with the provided name.
While exact matches are easy to determine, distinguishing between partial and no matches poses operational and legal challenges, especially concerning the General Data Protection Regulation (GDPR), as it may inadvertently reveal sensitive beneficiary information. Determining the boundary between partial and no matches requires precise algorithms. Strict algorithms may flag legitimate beneficiaries as potential issues, while lenient ones may violate GDPR by unnecessarily exposing beneficiary names. The complexity of this task is further compounded by the various variations in names, including spelling differences, nicknames, middle names, initials, transliterations, and different alphabets.
To address these issues, iPiD has partnered with Microsoft to create iPiD Match, a name matching algorithm powered by Azure OpenAI Service. It combines PostgreSQL and advanced tools to meet VoP requirements, ensure compliance while minimizing false positives, and adhere to data privacy standards.
iPiD Launches AI-Powered Name Matching Solution for Beneficiary Verification
The key benefits of this solution for financial institutions and payment service providers (PSPs) include:
- Increased accuracy by reducing false positives.
- Enhanced compliance with regulatory standards, including GDPR.
- Optimized customer experience with smoother payment processes.
This name matching solution enables financial institutions to achieve VoP compliance and invites stakeholders to explore its potential to bring better results for business development and customer service.
Comments:
This is a significant development in the payment industry, as it addresses the critical challenge of name matching for beneficiary verification. The use of AI and collaboration with Microsoft gives iPiD Match a competitive edge in terms of accuracy and compliance. By reducing false positives and ensuring GDPR compliance, this solution can help financial institutions and PSPs to streamline their operations and improve customer experience. The upcoming VoP regulation in Europe makes this solution even more timely and relevant.
