Posted on 03/10/2019
As not only transactions with a listed individual or company are a criminal offence, but also even to give financial advice, a firm may be in breach of financial sanctions for not having a proper detection system in place.
List-checker companies provide potential matches between the sanction lists and your queries. As you need to conduct your screenings on an ongoing basis, you want to have this regulatory update automated. No need to say that you hope that the list of the red flags is as limited as possible and that you try to avoid ‘false positives’ as much as possible. But how is this ideal situation obtainable?
Qualitative data in, qualitative data out
If you conduct your query based only on first and last name, you will get a lot of ‘false positives’ in return. But if your system integration provides you with additional data fields like place- and date of birth, without rekeying these data fields, the elimination of the red flags can start. By drilling down the number of positive hits by using all relevant client data, but without any additional input, makes the automated periodic checks much more efficient. There is no need for compliance to ‘unflag’ all possible hits.
The system records the audit trail, for new and existing clients, of all executed queries.