Hopehead Explainer: How to cut through business intelligence jargon

Even a brief period spent trying to familiarise yourself with the Business Intelligence sector will have unearthed a plethora of confusing and often opaque industry jargon. Even the phrase “business intelligence” (BI) is contested, with different firms talking about Due Diligence, Screening, Investigations and Strategic Intelligence practices.

This ambiguity points to a field of professional services that is relatively young and still evolving, where different providers offer a wide range of overlapping services that broadly sit under a single banner, but which in reality encompass a wide range of different types of research designed to meet diverse client needs: everything from bulk screening of agency employees to targeted intelligence gathering in multimillion pound law suits.

So how do you wade through the jargon to ensure that you find a provider who will actually be able to meet your specific needs?  This Hopehead Explainer seeks to demystify some common terms:

Red Flags & Smoking Guns

Some of the most commonly encountered cliches in the BI world are also some of the most poetical: if anyone was to create a banner for the industry, it would inevitably have to be red!

The term “red flag” has become so ubiquitous that it almost needs no explanation – we are all familiar with the idea of a red flag signalling potential danger. In the compliance sector, it gained cache via the Foreign Corrupt Practices Act (‘FCPA’) as a shorthand for potential violations. But in common BI usage today, a “red flag report” has become a generic piece of jargon, referring to a basic level of due diligence research that is only intended to identify obvious risks, without necessarily digging into the nuance or determining whether a perceived risk is real.

At the other end of the spectrum, a “smoking gun” has a whiff of Raymond Chandler, with a doughty detective confronting his quarry with the murder weapon still in their hand. BI firms do not – of course – investigate murders, so our “smoking guns” are decidedly metaphorical. The term tends to signify the hope that an investigation might find irrefutable evidence that someone is linked to a particular action. The opposite of a superficial red flag, a smoking gun is the (often illusory) holy grail of investigators seeking evidence to prove their clients’ suspicions.

KYC & Screening

Another commonly used but poorly understood term is “KYC”, which stands for Know Your Customer. A core tenet of modern financial crime regulation, the term is in common usage across the business world. KYC checks are intended to signify a basic standard of due diligence that any financial institution (or agent) should conduct before acting on behalf of a client. These checks are generally limited to confirming and documenting proof of identity; however, KYC is sometimes used inaccurately to signal more detailed due diligence checks. If you’re using this term, make sure you know what it is you’re asking for, or you could end up paying for a lot less (or more) than you intended.

“Screening” is a close ally of KYC and the two terms are sometimes used interchangeably. More accurately, screening relates to pre-employment checks, again of a basic nature and generally applied where a company is hiring a large number of people and needs to ensure that they meet minimum standards such as “right to work” and absence of criminal convictions. This research is formulaic and, increasingly, conducted with the help of AI . It is not intended to produce nuanced information about an individual and shouldn’t be regarded as comprehensive or investigative.

The “INTs”

Naturally enough, intelligence is a word that gets thrown around a lot. It is after all, core to what all BI firms seek to offer. At its most basic level, it simply means information that is not widely disseminated or is difficult to obtain. It helps clients better understand what, from the outside, might seem like an opaque situation.

But there are, of course, many different sources of information, which is where the jargon can start to take over. You may well have encountered providers talking about “OSINT” and “HUMINT”. These are short for “Open Source Intelligence” and “Human Intelligence” and have found their way into business from the military. In the world of espionage, there are other “INTs”, most notably “SIGINT” (signals intelligence), derived from intercepting electronic communications, but of course BI consultancies cannot offer access to such personal information.

Indeed, the use of military terminology can give the false impression that clients are getting access to something akin to a government intelligence service. This is a neat marketing tool, perhaps, but doesn’t accurately reflect the practices of an industry that relies on expertise in accessing freely available information, either from public sources or by interviewing people, rather than spy craft.

EDD, IDD, MDD… xDD?

The acronym soup keeps getting thicker… enter into conversation with most BI professionals and you will soon encounter an acronym ending –“DD”. The “DD” stands, or course, for due diligence, but this is a term that can have any number of prefixes.

“Enhanced Due Diligence” (EDD) is the most common. It is generally used to signal that the services of a BI firm go beyond simple KYC or screening checks, seeking to provide a deeper and more comprehensive view of an individual or situation.

But there are plenty of other “DD” acronyms that mean more or less the same thing – you might encounter “Investigative Due Diligence” (IDD) or “Management Due Diligence” (MDD) depending on the context, but the general purpose is to differentiate these services from lighter touch due diligence options.

With so many different acronyms floating around, it is worth confirming that the "DD" you’re paying for is going to be sufficiently thorough for your needs. Ask about the types of sources being access? Whether source interviews will be included? And, if so, how many? This should give you a clearer picture of the methodology that lies behind a particular acronym.