The challenges of sanctions compliance and enforcement have grown exponentially since the invasion of Ukraine, but there are ways to navigate them so that costs don’t escalate in tandem while compliance remains effective. Napier recently organised a webinar entitled ‘Why Client Screening is a Saving, Not a Cost’ in association with Regtech Associates. It featured an expert panel consisting of Napier’s chief product officer William Monk, Dr Angelika Hellweger legal advisor at Rahman Revelli and PwC’s Scott Samme.
Their insightful discussions covered topics ranging from the speed of change in the current global sanctions regime, the growing requirement for client screening, and the need for new generation client screening solutions to flex accordingly. Here’s our handy summary of the key points of the webinar:
Keeping up with the shifting sands of sanctions
Sanctions no longer only apply to financial institutions. Every business, no matter the size or industry, is now fair game for sophisticated criminals and their high-tech approaches. That's why advanced client screening solutions are a must-have for all organisations, including charities and NGOs.
In order to respond effectively to the constantly evolving sanctions landscape, businesses need to maintain an effective client screening process using data that is accurate and complete. For firms operating internationally, the challenges of complying with various sanctions lists are even more onerous, with the added difficulty of operating in multiple currencies and jurisdictions. To determine their risk levels, firms must first assess and analyse their territories, business partners, supply chains, third parties, counterparts, and other stakeholders. Keeping up with new sanctions lists, integrating subsidiaries and branches into the main system, and ensuring that the internal systems are not operating in isolation can be a daunting task. The complexities are multi-layered - currently there are sanctions that target both countries and individuals, encompassing such diverse areas as cybercrime, arms, and drug trafficking.
Outside of financial institutions, sectors such as luxury goods and tobacco are also moving to advanced client screening solutions. The "who to screen" window is getting bigger, as companies are required to verify client, transaction and reference data of entities and individuals including identification documents, corporate registration numbers, beneficial ownerships, supply chain logistics etc.
Building a resilient client screening programme
The traditional method of conducting fuzzy and name matching is both simplistic and time consuming. Shifting from sub-optimal legacy approaches to sophisticated end-to-end AI-driven solutions that identify and match transliteration, spelling errors, phonetic similarities, hyphens, extra spaces etc is essential.
Without a risk-based approach to client screening, compliance teams end up screening everyone against everything, leading to operational inefficiency and added risk. Depending on the industry and risk levels, businesses may need to screen-daily, weekly, monthly or in response to a triggered alarm. Shifting the rules appropriately can deliver efficiencies in the process without compromising the outcomes.
Screening for success: What to expect in 2023
We live in a fluid world, with shifting geopolitical events constantly affecting evolving legislation and sanctions. To remain compliant, firms need to stay abreast of the changes and build an environment where they can quickly respond, adapting configurations and readjusting screening rules. To maximise efficiency, they should consider the "what-ifs" and build a response into their screening system. Screening configurations need to be continually modified to allow compliance professionals to be on the front foot. Having an end-to-end solution ensures the targeting of the right people with the right parameters at the right frequency.
As different jurisdictions around the world continue to work together, there’s greater focus on supply chain logistics screening around the world. Screening tools are getting better at identifying ownership structures and formulating links and hierarchy, but there is still a long way to go. Firms should focus on filling technology gaps and considering how expansive systems should be to detect associated links, risks and adverse media.
An end-to-end client screening platform , allowing firms to benefit from a no code environment and sandbox testing is optimal. A sandbox allows users to test rule sets and configurations using real data to ensure optimum results before deploying live, and ensures flexible decision making and complete user control.
Having a single user interface for dashboards, scenario testing and tuning, reports, workflows, and screening configurations can help provide a better overview and control of risk.
Napier’s Client Screening has been developed to give compliance teams the most sophisticated, flexible and effective solution available today; all through one highly configurable, highly scalable platform. Get in touch or request a demo to see it in action.
Photo by Pawel Czerwinski on Unsplash
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