Enhancing watch list screening

The following Risk & Compliance practice note provides comprehensive and up to date legal information covering:

  • Enhancing watch list screening
  • The challenge
  • Limits of screening technology
  • Getting more out of watch list screening

Enhancing watch list screening

The complex nature of watch list screening creates challenges and presents risks. This Practice Note summarises the challenges watch list screening can present and the limits of screening technology and then suggests ways organisations can enhance watch list screening while avoiding additional complexity and/or cost.

The challenge

Watch list screening is a complex concern for businesses for many reasons:

  1. name matching

  2. politically exposed person (PEP) status determination

  3. geopolitical uncertainty

  4. rapid pace of regulatory/policy change

  5. complex business structures

  6. quality of data

  7. volume of data

  8. volume of transactions

  9. multi-jurisdictional nature of transactions

  10. subjective decision making

Limits of screening technology

IT screening solutions undoubtedly improve sanctions compliance. These solutions mean that more information is available and therefore screening is more effective.

However technology is not the whole answer. Implementing the right technology to screen data and identify potential sanctioned entities is absolutely crucial. But so is putting in place the right people and processes. Each of these three components is equally important.

And technology is not foolproof. Electronic systems, networks and processes can cause problems if they don't work as planned, eg:

  1. not screening all data fields

  2. relying on outdated lists

  3. filtering issues such as capabilities, calibration and matching logic

  4. difficulties in identifying names when the original script is different

  5. human error caused by inadequate training on the various systems or reviewer fatigue

Getting more out of watch list screening

The following table

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