4 Ways to Master Dynamic Watchlist Screening
Dynamic watchlist screening is the most challenging aspect of AML Compliance. In the world of complex partnership and collaboration among business platforms, falling into the trap of the wrong world costs a million dollar loss to the business.
The recent money laundering scandal is a clear testament to the importance of dynamic watchlist screening in the niche of anti-money laundering. The case of credit suisse bank is a clear example for mandating that anti-money laundering measures cannot be ignored.
The case gained momentum once the bank was charged as a result of their failure to comply with AML regulations, thus suffered at the hands of a “bulgarian trafficking gang”.
The legal proceedings found deficiencies in the bank’s implementation of policies, both with respect to KYC and AML measures.
Setting this example apart, as the world is becoming highly global and interconnected, there are no barriers in committing financial crime. These dilemmas are extending upto cross borders making it highly difficult for the compliance teams to counter the numerous threats emerging at the same time.
Resultantly, issues of fraud, corruption and money laundering emerge as splashing waves and take down the integrity of business with it.
What makes watchlist screening highly overwhelming?
In today’s age of digital reliance, cases related to money laundering and corruption are daily being updated. Media publications all across the world are publishing thousands of news related to KYC, AML, CFT related crimes.
For financial institutions, in particular, the volume of users being saturated into the market place is being highly overwhelming. Identifying and classifying from among them the individuals that are low risk or high risk is highly difficult.
Moreover, as regulations mandated by regulatory bodies are becoming highly dynamic, it is becoming harder than ever to comply with evolving regulations.
All these reasons, when combined, can be the sole reasons for making watchlist screening highly overwhelming for the businesses, organizations and mainly financial institutions.
Should we hope for a better solution to reduce the dilemma?
Avoiding the prevalence and entrance of money laundering around the premises of business, requires a consolidated screening system, that allows to screen multiple users, regardless of the background they belong to.
Institutions can definitely hope for better watchlist screening by investing in technological advancements. Considering the increasing reliance on technology and digital methods of running a business, modifying the screening process by improving the data quality, upgrade time and dynamic changes in watchlists issued by authorized sources could be the solution to a better financial environment.
However, this thing must remain clear that there is no one size fits all strategy. Each business is unique so there must be a watchlist screening strategy. By testing and trying for different solutions, businesses can become self-sufficient in fighting financial crimes including money laundering and corruption.
4 Ways to Master Dynamic Watchlist Screening
In 2024, crimes are becoming highly dynamic and unpredictable. The only way to counter it could be the use of more smart solutions, intelligent algorithms and authentic databases that can help detect the dynamic changes in no time at all.
Here is what you can do differently to enhance the efficiency of the global watchlist screening service.
- Use Smart Screening Software
While this could be uncontemporary to say but, investing in smart screening solutions could be the first step towards empowering your fight against financial crimes.
Outdated screening solutions are not that equipped to handle the diverse nature and dubious turns of financial crimes.
A screening software, backed by a comprehensive database, driven by smart algorithms and strengthened by AI integration could be the first step to bridge the gap between compliance and successful business operations.
- Risk- Based Customer Onboarding
False positives are another issue at hand for the majority of the businesses operating either at global or national level. Adopting a risk based approach can reduce the hassle among compliance officers to manage a large volume of alerts.
Categorizing customers based on their level of risk can help prioritize the risks that are important to deal with, thus allocating resources in the right place.
- Sought Data From Official Sources
Data is the new future among businesses seeking compliance. The effectiveness of the watchlist screening compliance and watchlist checks depends on the accuracy and credibility of the database being used by business to process their AML compliance.
- Ongoing Monitoring for High-Risk Customers
FinCrime is dynamic and highly evolving, especially in the current fast age of digitalization. Tacking the dynamic changes of risk levels is possible to keep a consistent watchful eye on changing levels of risks.
To Sum It Up:
A leading AML compliant business is only possible upon finding ways and technology that makes it easier to keep up with dynamic changes is subjects marked within watchlists and risk level among individuals as well.
