Watchlist Screening

Watchlist screening is the process of checking individuals and entities against watchlists to identify and prevent any potential financial crimes such as money laundering, terrorist financing, fraud, or other illegal activities. Watchlists are created and maintained by governments, international organizations, law enforcement agencies, and other regulatory bodies.

How Does Global Watchlist Screening Work?

Global watchlist screening is a crucial process for financial institutions to detect and prevent financial crimes such as money laundering, terrorist financing, and fraud. The screening process starts with identity verification using reliable data from multiple independent sources. After the identity is verified, the system scans the individual or entity against various watchlists, including global and governmental ones.

These watchlists contain information about prohibited individuals or corporations in specific industries, including finance, healthcare, and agriculture. The individuals or entities on these watchlists may include money launderers, specifically designated nationals, parties subject to sanctions programs, human traffickers, drug traffickers, arms traffickers, and individuals involved in the proliferation of weapons of mass destruction.

When a match is found with any of the watchlists, the financial institution is notified. The lists may include the Department of Foreign Affairs and Trade, Consolidated List of European Union, OFAC’s Specifically Designated Nationals and Blocked Persons, HM Treasury, Bank of England Sanctions List, European Union Terrorism List, World Bank Ineligible Firms List, FBI Most Wanted Terrorists and Seeking Information List, Non-Cooperative Countries, and Terrorists, Denied Individuals List, and PEP Lists.

Advantages Of AML Watchlist Screening

  • It makes customer onboarding fast and efficient by reducing manual work, resulting in a decreased workload for compliance departments. This allows institutions to onboard new customers quickly and efficiently, thereby increasing their business.
  • Institutions are notified when changes are made on watchlists, allowing them to keep up with recent compliance standards and watchlists. This ensures that the institution stays compliant and avoids any penalties or legal consequences.
  • Watchlist screening for customers optimization helps institutions comply with all official regulations and watchlists. This reduces the risk of non-compliance and any negative consequences that may result from it.
  • Watchlist screening is not only important for compliance reasons but also for protecting a company’s reputation. If a company is found to be involved in financial crimes or associated with high-risk individuals or entities, it can damage their reputation and result in loss of business.
  • Implementing watchlist screening is not only essential for larger financial institutions but also for smaller businesses. Smaller businesses may not have the same level of resources or expertise to carry out proper due diligence, making them more vulnerable to financial crimes.
  • Watchlist screening should be an ongoing process rather than a one-time check. Individuals or entities can be added or removed from watchlists at any time, and companies must continually monitor for changes to ensure they remain compliant.