Jordan’s Financial Institutions Struggle with Customer Due Diligence Guidelines Amidst Cultural Differences

============================================================

Jordanian financial institutions are facing unique challenges when it comes to adhering to customer due diligence guidelines, citing difficulties with cultural differences in naming conventions, transliteration, dates of birth, and address verification.

Challenges with Naming Conventions

In Jordan, traditional Arabic names can consist of up to five parts, including an honorific name indicating mother or father, son or daughter of, epithet, and surname. This makes it difficult for financial institutions to accurately identify customers and their beneficial owners.

Examples of Complex Names

• Muhammad ibn Abdullah al-Hussein bin Ali (meaning “Muhammad, son of Abdullah, grandson of Hussein, great-grandson of Ali”)
• Fatima bint Rashid Hassan (meaning “Fatima, daughter of Rashid, wife of Hassan”)

Transliteration Challenges

Spelling variations of common names like Muhammad, which can have dozens of different spellings depending on location, are making it harder for institutions to cross-reference individuals against sanctions lists or verify their identities.

Examples of Name Variations

• Muhammad vs. Mohammed vs. Muhammed vs. Mohammad
• Ali vs. Aly vs. Aliy vs. Ally

Date of Birth Verification Issues

Many individuals in Jordan are listed as having a birth date of January 1st due to high levels of home births and lack of registration. This makes it difficult for financial institutions to accurately verify customer information.

Solutions

• Conduct thorough research on the individual’s birth certificate or other official documents
• Verify the individual’s identity through other means, such as government-issued ID

Address Verification Challenges

Many countries in the MENA region use P.O. boxes instead of physical addresses. Personal mail and utility bills are often posted to these boxes, making it difficult for institutions to obtain proof of an individual’s physical address.

Solutions

• Use alternative methods to verify an individual’s address, such as a letter sent to their employer or a utility company
• Verify the individual’s identity through other means, such as government-issued ID

Technology as a Solution

Industry experts warn that the lack of vigilance in conducting interviews and verifying customer information can lead to poor quality data, putting financial institutions at risk of non-compliance. However, there is hope. The use of technology, such as name-matching software, is becoming more common in Jordan, allowing financial institutions to focus on creating a better customer experience.

Benefits of Technology

• Improved accuracy and efficiency in verifying customer information
• Reduced risk of non-compliance with regulatory requirements
• Enhanced customer satisfaction through improved service

In our next article, we will explore how financial institutions can utilize technology to prevent de-risking and improve their compliance processes.