International banks, acting on government orders to freeze assets from Libya, Egypt and Tunisia, are scouring hundreds of millions of client files for individuals on the new watch lists. But in doing so, bank compliance officers are grappling with a peculiar challenge: the myriad ways of transliterating Arabic names.

The arcane problem is opening the door to niche players, including a unicycling polyglot, who promise to help banks ensure they don't miss anyone because of misspelled names.

The...