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The 5 attributes of an effective sanction screening solution

By Microsoft Financial Services on August 3, 2017

Filed under Financial Services - Banking & Capital Markets

With financial crime on the rise and financial regulators cracking down[1], it is more important than ever for financial institutions to use effective, efficient, and flexible sanction screening that maximizes protection and minimizes impact on the business. Unfortunately, many sanction screening solutions are simply not up to the task, with a recent study showing that only 50% of money laundering or terrorist financing incidents were detected[2].

Financial institutions need the tool that screens all of their transactions to work well – as one slip up can be devastating. Just ask any of the banks that have paid billions of dollars in fines, adding up to more than $280 billion over the last eight years[3]. Clearly there’s a great need for effective sanction screening solutions, but what attributes separate the successful systems from those that miss half of the time? Let’s take a look at the five key qualities of a powerful sanction screening solution:

1. Keep track of continuously changing sanction lists and laws in multiple jurisdictions

It sounds simple, but maintaining up-to-date sanction lists to screen against is deceptively difficult. Some lists are updated constantly while other overlapping ones see updates less frequently. Plus, growing globalization further complicates compliance – as some nations may sanction certain entities that other states or international bodies do not sanction. Banks need a screening tool that simplifies the management of lists in multiple jurisdictions and that spans the private, commercial, and public spheres, while automatically keeping up with the continuously evolving content of those sanction lists.

2. Ensure that no sanctioned transactions get through

Ensuring that no sanctioned entities slip through the sanction screening process requires advanced algorithms and intelligent pattern matching. Sanctioned entities may have many aliases in multiple languages, while many sanction lists may only have one entry per entity. Successful screening solutions must be able to accurately pinpoint the variances in names across different languages and text forms, recognizing multiple, language-specific variances in how a name is spelt, nicknames, transposed characters, and more. A successful sanction screening tool must move beyond direct matching and include more advanced and automated screening techniques. Finally, an effective screening should not just be rigorous, but accurate– so banks experience a low false positive rate and don’t have to hire hundreds of operators to manually review countless alerts.

3. Have the flexibility to handle increasing transaction volumes and spikes in demand

A great sanction screening solution is useless if it can’t handle high volumes and sporadic spikes in demand. Regulators do not care when a sanctioned transaction snuck in, even if it was during a large jump in activity around a holiday. Banks are often in a bind with their screening infrastructure – either they invest heavily in the hardware and personnel required to handle the rare periods of extremely high volumes, or they save with more limited systems that then slow to a crawl and potentially fail during big increases in transaction activity.

4. Optimize case management and reduce operating costs

Every financial institution has their own software systems, business processes, and methods for handling compliance requirements. A configurable screening solution enables financial institutions to determine how they prioritize alerts, who handles escalations, and what is tracked and reported. It empowers banks to define efficient workflows that save operators’ time and shorten alert decisioning, which minimizes the impact on their business. Plus, a flexible screening tool doesn’t require banks to tear out and replace existing systems. Seamlessly integrating into the business reduces infrastructure costs, the time to deployment, and the amount of training required.

5. Make it simple to handle auditing and reporting

A sanction screening solution must enable banks to easily audit their processes and seamlessly report back to regulators with clearly demonstrated compliance. Financial institutions need visibility into their previously performed checks, the history of the transaction review process, and true hits and false alerts. Finally, an effective screening tool empowers banks to effortlessly maintain archives of their audits for their own benefit and for that of regulators.

Temenos’ screening solution, Screen, is built on Microsoft Cloud technology that is effective and efficient. Screen simplifies the management of multiple watch lists, employs varied and powerful screening algorithms with one of the lowest rates of false positive alerts in the industry, and utilizes the near-limitless scalability of the Microsoft Cloud. Additionally, Screen’s intuitive alert management capabilities and seamless integration with multiple systems help cut costs and streamline operations. Flexible configuration options enable agile, cost-effective implementation with ‘out-of-the-box’ customer and transaction screening and easy auditing and reporting.

The Swiss bank UBS implemented Temenos’ Screen solution, easily customized to their IT system, and dramatically increased efficiency. Operators managed an increase in the number of processed hits by 250%, while the cost per screened message plummeted – cutting total cost of ownership by 50%.

Why wait when you can start saving money and protecting your business better today? Try Temenos Screen on Microsoft AppSource now.

Read more on the Microsoft Banking & Capital Markets and Insurance blogs.

[1] SAS, Combating Financial Crime: The Increasing Importance of Financial Crimes Intelligence Units in Banking, 2016
[2] PwC, Global Economic Crime Survey, 2016
[3] Wall Street Journal, Top Bank Settlements, 2013

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