Top tips for effective sanctions screening.
Utilizing the power of Sanction lists and programs is crucial to stay compliant. But that doesn’t mean it’s always easy to manage. Sanction lists are growing constantly – we’re talking daily – and those published by the multiple different issuers don’t always align. Not only that, but the very definition of what a sanction is is also broadening and becoming more open to interpretation, making it more difficult than ever for businesses to effectively identify and manage risk.
Another challenging factor when using sanctions lists and program, for many organizations, it’s not just about vetting potential customers who are on sanctions lists and preventing them from doing any business transactions, but also to avoid disrupting the customer journey for legitimate customers and undermining the efficiency of the company’s operations.
There are far too many gaps within sanctions. Therefore, we’ve helped narrow down a few top tips that you can use to effectively identify these sanctions and utilize these lists and programs to their full advantage.
Tip 1 – Make sure your customer data is secure
Financial crime compliance costs have escalated, requiring greater focus on operational efficiency in KYC/AML. Streamlining data acquisition processes, creating common data lakes and investing in enriching customer and third-party data, are highly recommended.
It’s critical that your customer data is up to date. So it’s worth investing time, upfront, to cleanse and prepare the proper data to pull from. Incomplete or inaccurate data will result in false positives and when companies are screening millions of customers daily, this can become a real problem.
Where possible, it is wise to use data enrichment software to append secondary identifiers, such as date of birth, address, and nationality for individuals, or business address and registration number for companies. This will help your screening solution to focus results and will greatly improve process efficiency, saving time in unnecessary changes.
Tip 2 – Use proven, reliable technology for sanctions screening
Sanctions solutions should be capable of handling multiple lists, batch screening, and be able to set up predefined searches custom to an organization’s risk exposure and workflow. It’s important to ensure that the sanctions screening software you use to support your screening is fit for your purpose.
The sanctions screening solution you use to support your checks has to be both reliable and fully scalable, enabling you to screen the volumes of customer and transactions that your business requires.
The technology should be easy to use and offer customized settings, so that you can avoid unnecessary data pulls and adjust the criteria to match the purpose of your organization. The technology should also be quick and easy to read so not to waste any time making edits, notes, or analyzing old data.
Creating a sort of “acceptance list” is also a must, so that once customers are cleared by screening, they will not be re-screened unless the data on their file changes. This is particularly important when volumes of records are high, as it avoids the needless re-screening of records which have seen no change. On top of that, adding a date stamp to these lists ensure that all screenings have an audit trail, helping you stay compliant and providing evidence for any internal stakeholders.
Tip 3 – Screen real-time and comprehensive data
To ensure you are identifying sanctions from all relevant sources, the data you pull from must be comprehensive and up-to-date and, ideally, consolidated all in one place with other watchlist databases such as watchlists , denied/restricted party lists, terrorist watchlists, and more.
Some businesses rely on search engines to locate such information, but this is inefficient and could leave your organization exposed to sanctions breaches and other risks. Solutions like FedCheck for compliance can help keep your records up to date with data that is updated in real-time every single day. FedCheck’s complete cloud-based solution offers identity verification, instant data from over 2,000 databases (including OFAC), enhanced due diligence, analytics and data management, continuous monitoring, easy-to-read reports, and more.
Sanctions lists come in a variety of formats. Being able to view them in a single, easy to consume fashion, can enhance your entire sanctions review process.
With new sanctions being added and existing ones amended or retracted daily, getting ahead of any potential challenges can help you stay compliant. Help mitigate risk to your organization, existing customers, and your IP by visiting FedCheck Compliance to learn more about the latest screening solution.
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