What is a government watch list?
Watchlists are databases that include lists of persons convicted of fraud, suspected of terrorism, or other types of corruption and criminal offenses. These can be local, national, or global. Global watchlist and sanctions databases include information from domestic and international databases that store data on people and organizations who are sanctioned, on a criminal list or prohibited in certain industries, such as finance or healthcare.
International sanctions are political and economic decisions that are part of diplomatic efforts by countries, multilateral or regional organizations against states or organizations either to protect national security interests, or to protect international law, and defend against threats to international peace and security.
People or entities found on a watchlist or sanctions list may be included because they are known or suspected drug traffickers, terrorists, or have been convicted of fraudulent crimes. Entities can be added to watchlists based on specific laws or actions by the entity itself, or by the other organizations that it regularly does business with.
Why is ‘watchlist and sanctions screening’ an important part of doing business?
Anti-Money Laundering (AML) & Know Your Customer (KYC) regulations are well known and include fines that companies would like to avoid but watchlist and sanctions screening is more than avoiding fines. The US PATRIOT Act mandates KYC for all US banks. The FCPA (Foreign Corrupt Practices Act) is a regulation that is governed by the SEC and DOJ that requires due diligence similar to AML & KYC requirements. Similar to these US regulations, the UK Bribery Act also requires substantial due diligence practices. Watchlist and sanctions screening is a ‘best practice’ for all of these regulatory mandates and much more.
Conducting business ethically, such as not doing business with entities engaged in criminal activity like human trafficking, is important for a company’s reputation in hiring and acquiring customers. A breach of trust is more than a risk of a fine or a lawsuit, it can permanently damage the ability of a company to hire the highest-quality candidates and complete key deals. Companies that act ethically and are proud of a socially conscious mission are truly making a better world through data science.
Why is the global watchlist screening process important for financial services companies, background screening companies, supply chain, neobanks, and others?
Watchlist and sanctions screening is incredibly important for finance organizations and companies with strict due diligence requirements as a matter of doing business. Companies working to change existing finance paradigms through fully digital services (Neobanks, crypto platforms, other disruptors) have an important need for watchlist and sanctions screening. Even though digital disruptors don’t have a brick & mortar presence they have the same risk and compliance requirements and often a greater need to help build trust with potential clients, partners, and legislators. All digital finance disruptors need to make sure to have a robust risk and compliance system in place.
How does the global watchlist and sanctions screening process traditionally work?
Traditional watchlist and sanctions screening providers rely on screening against people or entities against a record looking for key data. This often uses outdated technologies and error-prone “fuzzy” name-matching against global lists that return structured data results, often with veritable mountains of data to sift through.
Analysts doing adjudication use manual data searching online, copy/paste to spreadsheets, manual database updates, and sifting through vast quantities of data to find key information coupled with limited update frequency makes the accuracy of traditional screening activities questionable at best.
How is Vital4 global watchlist and sanctions screening data unique?
Vital4 has streamlined name matching with a proprietary AI system, offering real-time, custom data; reducing false positives, and increasing compliance by providing more relevant data. With coverage of over 6,000 data sources and automated updates, increasing screening efficiency is a key benefit of AI machine-learning, by reducing false positives we reduce man-hours and increase accuracy. A nimble, customizable, cloud-based platform ensures that companies can get the up-to-date, filtered, specific key data they need, exactly when they need it. For the digital disruptors which need fully digital systems and often have unique needs, Vital4 is the screening disruptor built for fintech disruptors, financial services companies, background screeners, and corporate due diligence for supply chain firms.
How can the global watchlist screening process be optimized with Vital4?
A robust screening solution, built on AI, that delivers filtered accurate data helps companies mitigate risk by reducing false positives. Speeding up the remediation process is beneficial to customer service and reduces the overall labor costs associated with watchlist and sanctions screening. Automated updates translate to significantly less downtime for updates, releases, and maintenance, which is crucial to customers operating 24/7 online.