2. 2
Community Solutions For Community Challenges
Financial crime is top of
the agenda for banks
Financial crime is top of
the agenda for banks
Significant costs
at stake….
Significant costs
at stake….
All geographies / All types
of players impacted
All geographies / All types
of players impacted
... Yet no competitive
advantage for banks
... Yet no competitive
advantage for banks
Lots of duplication…
… for universal challenges
Lots of duplication…
… for universal challenges
3. FATF 16 Information quality
Compliance Analytics
Sanctions list
Mngt service
Sanctions KYC AML
Processing
services
Traffic
analysis
Standards
Data
repositories
KYC registry
AML testing &
tuning
Sanctions
Screening
Sanctions Testing & tuning
(transaction & client systems)
Traffic restriction
(RMA)
Financial Crime Compliance Roadmap
Live
Development
Qualification
Exploration
Quality
Assurance
Client/Name screening
3
5. Regulatory scrutiny and enforcement
of sanctions policies is increasing
Available screening solutions
complex and costly to maintain
Operational challenge for financial
institutions
Context around Sanctions screening
SWIFT
Sanctions
Screening
service
5
6. • Screening engine & user interface
• Centrally hosted and operated by SWIFT
• No local software installation & integration
• Real-time
• Sanctions List update service
• Screening engine & user interface
• Centrally hosted and operated by SWIFT
• No local software installation & integration
• Real-time
• Sanctions List update service
Sanctions screening over SWIFT
Your institution
Your correspondents
6
7. Screening engineSanctions Portal
SWIFT Network
FINcopy
Transaction is
copied
Decision to deliver (no hit / false positive)
or abort transaction (true hit)
Transaction abort notification (true hit)
1
5
Service
user
Sending institution
Managed by SWIFT
Service overview – as a sender
7
Outgoing transaction
1
3
2 4
Transaction is delivered
as-is (no hit or false positive)
Receiving
institution
8. Service overview – as a receiver
8
Service
user
Transaction is
copied
Transaction is delivered
as-is (no hit or false positive)
Instruction to deliver
transaction
Transaction is delivered
flagged (true hit)
2 4
Outgoing transaction
1
Sending institution
1
1
Receiving
institution
Screening engine Sanctions Portal
Managed by SWIFT
SWIFT Network
FINcopy
9. Public, Private & Good Guys Lists
9
Public Lists
29 Public Sanctions
lists supported
Private List Good Guys List
• AU – Australia Department of Foreign Affairs and Trade
• AU - DFAT Countries Embargoes
• AU - DFAT Iran Specified Entities List
• CA – Canada Foreign Affairs and International Trade
• CA - FAIT Countries Embargoes
• CA - Office of the Superintendent of Financial Institutions
• CA - OSFI - United Nations Act Sanctions
• CN - People's Republic of China - Ministry of Public Security
• EU - EUROPE Countries Embargoes
• EU - European Official Journal
• FR - Journal Officiel français
• HK - Hong Kong Monetary Authority
• HK - HKMA Countries Embargoes
• JP - Ministry of Finance
• NL - Frozen Assets List - Dutch Government
• NZ - New Zealand Police
• SG - Singapore MAS - Investor Alert List
• CH - Switzerland Secrétariat d’Etat à l’Economie
• CH - SECO Countries Embargoes
• UK - Her Majestys Treasury
• UK - HMT Countries Embargoes
• UN - United Nations
• UN - UN Countries Embargoes
• US - Office of Foreign Assets Control SDN list
• US - OFAC Palestinian Legislative Council
• US - OFAC Part 561 list
• US - OFAC Foreign Sanctions Evaders
• US - Financial Crimes Enforcement Network
• US - OFAC Countries Embargoes
11. Expand the Functionality
• SWIFT FIN Securities (Cat 5)
• SWIFT FIN Treasury (Cat 3)
• SEPA
• EBICS
• And Others…
Provide a Full Offering
• A Complementary Product
• Screen Your Customer Data base
– Sanctions Lists
– PEP Lists
– Private and Other Lists
Screening of
Any Format
(SAF)
SWIFT’s Sanctions Screening – Future Updates
Customer
Screening
Expand
Functionality
& Capability
13. In a world of unprecedented complexity
and change:
• How can I ensure my screening solution works?
• How can I demonstrate I understand my solution and how it
mitigates risks?
• How can I make my screening solution more effective – and
more efficient?
Banks face a sanctions compliance
challenge
14. Effectiveness
• Provide assurance that your
system works
• Measure system’s fuzzy
matching performance
• Assess coverage of sanctions lists
• Align screening system to your
risk appetite
Efficiency
• Reduce false positives
through iterative testing
• Build optimisation tests into
your processes
Testing
Meeting regulatory demands
Tuning
Managing cost and resources
Sanctions compliance – balancing
priorities
with
15. • Outdated lists
• Missing entry
types
• Missing entries
• Language
variants not
screened
correctly
• Deleted records
still screened
• List scope
• incorrect or not
aligned with bank
policy
• Inconsistent
implementation
across filters
• Entity and alias
types screened
unnecessarily
• Inconsistent
screening
performance across
message types
• Message or file
elements not
screened properly
• Overreliance on
specific fields (e.g.
address or country)
• Poor fuzzy
matching
performance
• Line break, word
order, sequences
• Poor performance
against particular
entries (short or
long names,
aliases)
• Character set
matching issues
15
Issues identified through testing
Sanctions Lists
Quality
Screening
Policy
Message
Types
Filter
Weakness
16. Formats
Settings
Lists
Automate • Repeat • Compare • Monitor
Sanctions testing process
Define
test objective
Download
test objective
Process
test files
Upload
hit results
View
test results
17. The one-off assessment report
17
This report offers a
One-off Assessment of an
Institution’s Sanctions Environment.
It serves both
Regulatory & Internal Audit purposes.
Several predefined tests are executed
and the bank gets a report with
Test results, Observations and Recommendations.
18. 18
The one-off assessment report portfolio
Audit ASSESSMENT Evaluation ASSESSMENT
Scope&
Purpose
Deliverables
• Constrained Audit
• Internal & external
regulatory purposes
Formal Report
• Comments and
Explanations
• Evaluation of filter
performance
• Identification of areas
for improvement
Formal Report
• Findings,
Recommendations
& Remediation plan