Know Your Employees with Identity Resolution
Lately we’ve been covering the Bank Secrecy Act (BSA) in depth, with particular emphasis on the mandate to Know Your Customer (KYC) and Know Your Customer’s Customer (KYCC). To aid in compliance with the BSA’s ambiguous requirement (PDF) to “form a reasonable belief that [the bank] knows the true identity of its customers,” and to avoid hefty fines and bad publicity, every bank should go beyond what federal regulators require. Infoglide Software strongly recommends an identity resolution solution that uses sophisticated similarity search techniques to resolve multiple identities into one unified view.
However, stories like this one below from Times Herald Record, lead us to a great idea for a similar mandate for retail industry:
“Newburgh town police say a local clerk at the Wal-Mart Super Center on Route 300 has been ‘returning’ Wal-Mart merchandise and pocketing the cash. Her take? Over $30,000. Police arrested Darlene Banks, 50, of the City of Newburgh, Tuesday night as she showed up for work. It ended her two-year tenure at the local Wal-Mart, where she was a customer service specialist — with the ability to do merchandise returns.”
Stories like this one involving the ironically-named Ms. Banks are rampant.
“The amount of employee theft nationwide is staggering,” observes the Observer Dispatch. “Employee theft made up 47 percent — or $17.6 billion — of the retail industry’s inventory loss in 2005, according to the National Retail Security Survey directed by Richard Hollinger at the University of Florida. In contrast, shoplifting amounted for only 33 percent of disappearing store items.”
To shrink this shrinkage, wouldn’t it behoove the retail industry to go beyond ordinary employee screening procedures? If banks are required to Know Your Customer, then it’s probably a good idea for retailers to Know Your Employee (KYE). With an identity resolution solution, Loss Prevention (LP) professionals are able to get a clear comprehensive, composite depiction of current employees and potential new hires. Identity resolution solutions will aggregate information from existing negative databases, uncovering convictions, bad debt, driving histories, lawsuits and more.
Back to the same Times Herald Record story:
“Police say the scam was simple enough. Clerks would take merchandise from Wal-Mart shelves and run it through registers as already-purchased items being returned. In some cases, Banks got cash back; in some cases she took gift cards she could use in the store — or sell on the street. Police say Banks took care to avert the eagle eyes of Wal-Mart loss prevention investigators. She never returned more than $200 worth of stuff at one time and mixed up the type of items she’d return: Wal-Mart jewelry, cigarettes, clothes, and, now and then, a television.”
Identity resolution solutions also tap into inventory and returns data and with a system in place, Ms. Banks’s scam would have been easier to detect and quicker to apprehend.
Please see Identity Focused Retailing for more information.
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