Sanctions screening costs doubling every four years - Swift
27 November 2012 | 10715 views | 1
The operational costs of sanctions compliance to financial services firms is doubling every four years, according to data compiled by interbank co-operative Swift.
Financial institutions are increasingly seen as the front line in the fight against money laundering and terrorist financing.
Sanctions lists themselves are not particularly large, says Swift, amounting to about 40,000 distinct names and synonyms. However, when you apply possible fuzzy matching to searches (to account for potential misspellings, phonetic similarities etc) this generates an equivalent of 4,000,000,000,000 possible names that filters must screen.
"Swift data reveals the growth in number of transactions worldwide," says the financial messaging utility in a white paper on the subject. "By correlating that with the rising number of watchlists, we estimate that the cost of sanctions compliance at financial institutions will double every four years."
Swift introduced its own sanctions testing tool in October.
Nicolas Stuckens, manager, AML & sanctions initiatives, Swift, comments: "Sanctions lists evolve daily and the number of transactions that need to be screened is rising rapidly. Banks are expected to keep up and tune their sanctions filter in line with their risk appetite, so it has never been more important that systems and processes are effective and efficient."