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Organizations across regulated industries are obligated to screen transactions and customers against sanctions lists in order to avoid transacting with sanctioned countries, individuals and entities. And doing so is a required and essential part of an AML compliance program.

To help organizations manage compliance more effectively, financial industry analyst group Aite—in partnership with CSI—recently performed an intense investigation into the current environment for watch list software solutions, market trends, and how technology addresses both. The firm also explored a path forward for stakeholders and vendors based on advanced capabilities currently available for improving compliance programs in financial services and other industries.

The takeaways include:

  • Watch list programs face increasingly complex expectations and challenges as transaction volume grows and the characteristics of financial services change.
  • Legacy technology has generated millions of anti-money laundering (AML) alerts annually across all sectors of financial services, creating ever-increasing pressures on costs and resources.
  • AML leadership can take a three-pronged approach—using data, technology and “socialization”—to evaluate watch list functionality both now and two to three years out.
  • Proprietary algorithms are key differentiators, as are transliteration capabilities (an ability to translate between different language scripts) and the software’s ability to interpret phonetic differences across languages.
  • While suspicious activity report (SAR) volume is leveling off due to incremental improvements in AML software, regulatory expectations are growing.

To learn how your institution can implement the technology and best practices for an airtight AML compliance program, read the full white paper, Global AML Watch List: Technology Attacks False Positives, from CSI in partnership with Aite.