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EBAday 2022: Balancing smooth onboarding with sanctions screening

EBAday 2022: Balancing smooth onboarding with sanctions screening

During her fireside chat on day two of EBAday, Sabine Zucker, head of trade finance and transaction banking, Raiffeisen Bank International addressed a range of factors influencing the connection between banks and corporates.

After canvassing the opportunities available to both types of firms in the form of Open APIs, Buy Now Pay Later and Request to Pay, moderator Andreas Burger, partner, Deloitte, asked Zucker to turn to the topic of digital onboarding.

While it may sound contradictory, stated Zucker, we need both ease of onboarding while due care is taken by the bank to make sure all the due diligence is carried out.

“As a bank you have to fulfill certain criteria to check if the customer has the right to authorise transactions. With regard to sanctions and compliance, no serious bank wants to be involved in any fraudulent or illegal payments. This is becoming more and more important.”

“With the current war, we are very much confronted with sanctions.”

This is particularly challenging as banks have been trying to automate their processes for some time to move from manual intervention to straight through processing. Yet, when confronted with sanctions banks are having to revert back to manual intervention once more.

“Lots of payments pop up in various fields which need to be checked, but this is a learning opportunity. The banking industry is learning how to handle sanctions, and in Europe we are being confronted with the largest amount of sanctions that we’ve ever seen.”

Given movement toward greater connectivity models through, for example, things like premium APIs, Burger asked how banks can ensure their compliance and cyber risk prevention strategies can keep up.

“The speed element comes in here,” noted Zucker. “It’s getting faster, it’s getting more instant, it’s getting more real time. On the other hand, you have to do these checks and be careful that unwanted payments don’t go through. So I think, the faster you are with payments systems, the faster you also have to be with your compliance checks.”

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