History has taught us many things, but one undeniable lesson remains afresh no matter what- financial crime and fraud: how fraudsters and money launderers are constantly evolving their tactics. According to the United Nations, approximately $1.5 trillion is funneled annually through banks worldwide for terrorist activities and criminal organizations. This staggering figure highlights the significant role of transaction screening.
Sanctions screening plays a vital role in the entire customer’s lifecycle, from onboarding to periodic reviews to screening financial transactions such as domestic and cross-border payments. However, existing screening solutions are more siloed, inefficient and produce high volumes of false positives resulting in numerous challenges to implementing transaction screening systems. Below shared are some of the challenges:
With the proliferation of technology and digitization coupled with frequent modifications in (global data sources (sanctions, watchlists, PEPs, etc.) due to changes in geography, jurisdiction, and political landscape), there is an upward trajectory in compliance costs, combating criminal enterprises, and financing terrorist activities.
Unification of data sources and lists, poor data management, siloed systems, manual data processes, and regional naming conventions lead to operational challenges of transaction screening.
Incorrect system configuration might lead to excessive false positives and missing suspicious transactions resulting in significant fines for sanctions violations and reputational damage.
Criminals frequently modify their methodologies to avoid being caught for financial crimes. Banks must stay tuned with the new strategies for transaction screening systems to identify and stop illegal activity successfully.
For transaction screening, it is vital to screen the correctness and accuracy of the data as they come from various external and internal sources. One mistake could lead to high false positive rates causing higher expenses, labour-intensive manual checks, and possibly longer processing times for legitimate transactions.
In an era where compliance is non-negotiable, IMS Compliance boasts an extensive audit trail, assuring complete transparency and accountability in every screening process. This fully managed solution screens all incoming and outgoing messages against up-to-date sanctions lists and instantly alerts if any suspicious is detected. Our solution also addresses the OFAC list to fight against money laundering and other fraudulent activities. There is a provision where companies can maintain a proprietary list of the customers or groups they want to block with fraudulent activities.
Initiates prior to approving any transaction, ensuring proactive risk assessment.
Identifies sanctioned entities, locations, and activities to prevent potential compliance breaches.
Utilizes up-to-date sanctions lists, promptly refreshed to align with regulatory updates.
Integrates seamlessly into a firm's comprehensive risk data system, fostering a holistic approach to risk management.
Equips analysts with clear and comprehensive risk insights, enabling efficient and effective remediation efforts.
Embraces a broad spectrum of risk insights, combining both internal and third-party data sources for comprehensive risk coverage.
