5 tips on how to choose the best sanctions screening software

Sanctions screening software plays a crucial role in the anti-money laundering and counter-terrorist financing (AML/CTF) process. The right technology can improve the customer experience, improve relationships with regulators, and provide a more efficient, scalable operation. The wrong technology slows compliance teams down, agitates customers, and exposes the business to unacceptable degrees of risk.

This article presents five tips for compliance leaders to consider when selecting the best sanctions screening software for their company.

1. Ensure the software is comprehensive and future-proof

When evaluating sanctions screening software, a meticulous analysis of its key features will form the cornerstone of a thorough assessment. Among these features, real-time screening is paramount, offering organizations the critical capability to respond promptly to evolving threats. Complementary to this, fuzzy matching functionalities can contribute to the precision and accuracy of the screening process, mitigating the risk of overlooking potential matches. Equally, the software’s ability to manage false positives effectively can directly influence a firm’s operational efficiency and resource allocation, and configurable rules further enhance adaptability, enabling organizations to tailor the screening tool to meet their specific requirements.

However, beyond the technical functionalities, a forward-looking perspective becomes essential. When analyzing the key features of sanctions screening software, organizations should confirm if the solution will serve the roles of all key stakeholders in their fraud and AML (FRAML) program, including analysts, team leaders, and chief risk officers. Specifically, firms should ask if the solution empowers users to implement role-based access.

Automation, a linchpin for cost-effective compliance, introduces a practical dimension to the evaluation process. Identifying repeatable tasks and assessing the extent to which the solution automates these tasks are pivotal considerations that directly impact overall operational efficiency.

Moreover, the software’s alignment with a risk-driven approach is a crucial aspect of the analysis. Organizations must scrutinize the software’s capacity to implement risk policies effectively, dynamically score customer and case risks, and seamlessly integrate into existing workflows. This ensures a holistic and proactive risk management strategy.

Considering the broader workflow, the evaluation extends to whether the chosen software provides a comprehensive screening solution or necessitates additional tools from different vendors. Opting for a platform-based approach can prove advantageous, fostering a unified view of customer risk across various workflows and business units. This approach streamlines processes, triggering automatic responses, such as enhanced monitoring, based on outcomes from transaction monitoring.

2. Determine the sanctions screening data available

To ensure effective sanctions screening, it is important to determine the vendors’ available data and ensure the software has appropriate data integrations to cover the jurisdictions and territories where a firm operates and provides services. Ideally, firms should prioritize vendors that offer a combination of software and proprietary data. This approach provides several benefits, including the ability to avoid shopping around and maintaining multiple vendor relationships and contracts. For larger financial institutions, the procurement exercise alone can cost hundreds of thousands of dollars.

Another advantage of sourcing both the software and data from a single vendor is that the software and data are closely linked from the start. The software is built to navigate through the data better, send feedback to the data algorithms, and perform other useful functions.

However, it is also crucial to prioritize the quality of data, not just the quantity. Outdated records can contribute to high volumes of false positives, rendering screening against real-time risk much less effective. Rather, firms should consider partnering with a vendor that uses teams of global data experts to review and edit problematic profiles to ensure the AML/CFT data acquired by machine learning algorithms is accurate and up-to-date.

3. Make sure the software is compliant with the AML regulations

Since non-compliance with sanctions regimes can lead to hefty fines, reputational damage, and legal repercussions, finding a screening solution that aligns with AML regulations will be top-of-mind for compliance teams. A key aspect to look out for when assessing multiple sanctions screening solutions is the software’s ability to access and incorporate updated sanctions lists from reliable sources. These lists, maintained by government agencies and international bodies, include individuals, entities, and countries subject to sanctions or restrictions. By accessing up-to-date lists, the software can help firms stay ahead of regulatory requirements and minimize the risk of inadvertently engaging with sanctioned entities.

In particular, features like automatic updates and alerts for changes in sanctions lists should be prioritized, as they can help enhance compliance efforts and enable proactive risk management. 

4. Consider the integration and technical aspects

How vendors implement their clients’ AML programs is critical. A slow implementation process risks undermining the customer experience and delaying the roll-out of new products and services. Poor support over time can become a chronic issue weighing compliance teams down if, for example, the ability to add new rules and capabilities is impacted. But what does ‘good’ look like regarding integration, and what technical aspects should be prioritized? 

• Compatibility and integration: Senior decision-makers should make sure to evaluate how well the software is integrated with their firm’s existing systems and assess the level of support the vendor will provide during the integration process to ensure a smooth transition without disruptions. 
• Scalability and performance: Ensure the software can handle increasing data volumes and transactions as your business grows, ensuring it meets operational requirements without compromising performance.
• API response times: Check for fast and consistent API response times to minimize transaction processing delays and ensure seamless operations. 
• UI and UX: Assess the user interface for intuitiveness, ease of navigation, and accessibility, looking for features such as customizable dashboards and multi-language support to enhance user productivity. 
• Configurability: Look for a high degree of configurability in screening rules, alert thresholds, and risk parameters, enabling easy adaption to evolving compliance requirements without extensive technical support.   

5. Check the vendor’s reputation

Finally, it’s important to choose a reliable vendor in the industry to ensure business continuity and increase operational resilience. Securing comprehensive software, good data, and the right price doesn’t guarantee a sustainable relationship with a vendor. The quality of support the vendor is able to offer, if and when a firm needs it, is what underlines this. 

Even if assistance isn’t verbally requested, would the vendor still seek to help compliance teams make the most of the solution in improving their efficiency and reducing their risk and cost of compliance? There will be times when unusual reports or a unique screening feature is required. Will they provide the necessary support then (and with a smile)? These are the things that make the vendor-customer relationship a happy one. The best way to check this before becoming a customer is to connect with the vendor’s existing customers.

Sanctions Screening with ComplyAdvantage

Hundreds of FIs worldwide rely on ComplyAdvantage for a sanctions screening solution. Whether they’re conducting thousands of checks a month or less than a hundred, they benefit from:

• Fully automated screening and monitoring that pushes system-wide updates every hour based on global sanctions lists, watchlists, adverse media, PEPs, and warning lists.
• A completely integrated experience that combines data feeds, search, and case management into a single workflow and reduces onboarding time by up to 83 percent.
• A 66 percent increase in straight-through processing through automated flow via RESTful API and granular data segmentation that removes tens of thousands of false positives.
• Consolidated entity profiles where a single alert is generated with all the information needed to make an informed decision.
• A better workflow to assist everyday reporting, where data feeds, case management systems, and CRMs are integrated to match your workflow.