The unprecedented level of new sanctions targeted at the Russian regime will undoubtedly challenge firms’ screening capabilities, alert management, and also speed of response.
Secondary to this will be the ability for firms to absorb the associated increases in sanction screening costs. However, there are a number of opportunities to reduce costs without affecting screening effectiveness.
In this insight piece we pose some key questions that firms would need to consider to identify and quantify their opportunities to safely improve the efficiency of their screening operations.
Sanctions Lists
Are all of the lists utilised in sanctions screening required from a Law, Regulation, and/or Policy perspective? If not then can the list be safely decommissioned?
Screening
Do all entities need to be screened against all lists? Where an entity does not have a potential nexus to the associated jurisdiction, is screening actually required?
Matching
Has a risk-based approach been applied to the matching algorithms with sensitivity reflecting the level of risk? This is particularly relevant where the screening engine is also utilised for non-sanctions purposes, such as Politically Exposed Persons and Adverse Media screening or as a preventative re-entry control.
Tuning
Are the matching algorithms assessed for performance and tuned regularly? Consideration needs to be given to both screening effectiveness and also the generation of excessive false positives.
Investigator Performance
Is the performance of alert investigators continuously monitored for both quality and volumes, with targeted interventions in place to address any deviation from a defined minimum standard?
Resourcing
Can the initial level(s) of alert investigation be migrated to lower-skilled, lower-cost resources (investigators), utilising nearshore / offshore models?
Machine Learning
Have Machine Learning technologies been applied to alert investigation processes thereby reducing the volume of manual reviews, and potentially eliminating the initial level(s) of investigations?
Data
Is the screening solution being presented with high quality, structured data? Failure to do so will impact both screening effectiveness and also the volume of false positives generated.
QA/QC
Are alert disposition quality reviews being conducted in line with risk appetite, and are quality reviews risk-based and informed by investigator experience and performance?
Total Cost of Ownership
Could entity and payment screening be consolidated onto a single solution, thereby reducing the total cost of ownership through a simplified technology stack?
Gracechurch has extensive experience in designing, implementing and operating some of the industry’s most advanced sanctions screening programmes. If you wish to discuss any of these aspects and how they may affect you or your business, please contact a member of the Gracechurch Financial Crime Prevention team.
Steve Barnett
16 April 2022