Banking, financial services, and insurance (BFSI) companies are primary targets for unscrupulous entities that benefit from financial crimes such as money laundering, terrorist financing, identity fraud, and graft and corruption. To deter criminals from targeting and using their organizations, BFSI companies must have a robust security system in place, one that will enable them to effectively and efficiently distinguish legitimate customers and transactions from financial criminals and illegal activities. This means investing in software solutions that are designed to keep sanctioned and blacklisted individuals away from the system.
Table of Contents
Employing a sanctions screening solution is one of the many measures that help BFSI companies keep financial criminals out of their systems. This solution is an important component of many Know Your Customer (KYC) and Customer Due Diligence (CDD) programs. What this solution does is that it compares the details of a prospective or existing customer and the sanctions lists maintained by various financial organizations and regulatory bodies. At first, this task might seem quite straightforward, as the solution only has to match a sanctioned entity’s name and bar the identified persona from availing themselves of the BFSI company’s services. Modern financial criminals, however, are more enterprising than one might imagine, and they have developed strategies to elude dated sanctions screening programs that are designed to detect their presence. These include using aliases, altering their details, and obfuscating markers that matching and screening programs often look for.
Much like the solutions used in BFSI companies, the methods that criminal entities use to compromise the systems of financial organizations are continuously changing. This means that to ensure the effectiveness of their screening process, the companies that make up the financial industry have to keep up with technologies that AML solutions providers are developing and that criminals have yet to overcome.
Thwarting financial criminals’ attempt to use a financial organization as a platform to carry out their illegal activities is an ongoing affair, and sanctions screening solutions providers are well aware of this fact. As such, the products released by these security software developers are able to do more than match names with the list of known financial criminals and the entities that they are associated with. In addition to finding exact matches across multiple reference lists, modern sanctions screening solutions also make use of other strategies to ensure that identified criminals are not able to make their way into financial institutions’ systems or exploit existing BFSI customer accounts to do the same. This can be done by employing technologies that enable the following:
Updating and improving a BFSI company’s sanction screening solution is an investment that will continue to pay off over the years. By increasing their budget for sanctions screening now and acquiring new tools that they can use to make customer and transaction screening more modern and more efficient, financial organizations are effectively deterring criminals from targeting them. This can prevent them from incurring fines and reputational damage that they would otherwise be exposed to. Investing in their sanctions screening solutions now will also enable BFSI companies to catch up with the emerging technologies that other financial companies are using to combat financial crime in a quick, practical, and economical manner.