Best practices for integrated payment screening

Firms and regulators are moving away from artificially siloed approaches to financial crime as they become aware of the complex relationship between sanctions evasion, money laundering, and the predicate crimes that enable them. In parallel, integrating risk management processes with the data and technology that supports them is becoming ever more crucial. 

Yet, in our most recent survey, it became clear that firms were frustrated with a lack of integration in their compliance processes and systems. Teams find themselves working in isolation, unable to tap into the wealth of risk intelligence that exists elsewhere in the business.

This was especially evident to us in payment screening. Nearly 40 percent of the global compliance leaders who responded told us a top challenge was the ability to integrate their current screening system with their wider compliance tech stack. 

It’s clear firms are ready to make a change for the better, but it can be hard to know the best place to start.

Payment Screening: 4 Keys to Integration Success

During my career in risk and compliance, I’ve seen many firms pursue compliance technology integration with mixed success. This held true whether they did so through totally new solutions or iterative improvement of their existing ones. I’ve come away with four key areas that can help firms ensure successful integration of payment screening and the entire compliance process.  

1. Understand which stakeholders should be involved and their needs – Successful integration takes coordinated effort, so ensure the right people are involved from the beginning. Taking note of core stakeholder needs – especially for the Chief financial officer (CFO) and the chief technology officer (CTO) – helps frame the project around key financial realities, ensuring a sound connection between risk management improvements, commercial goals, and your technology estate.
2. Estimate 50 percent longer than initially expected – These projects tend to take longer than anticipated, so it’s best to plan for it at the outset.
3. Document your calibration differences – There are many reasons why you may choose to calibrate your matching configuration for payment screening slightly differently from that of your regular screening and monitoring solution. Make sure that these differences are all captured in a Screening Approach document, alongside the rationale for any differences. Periodically review this document and consider whether your chosen approach continues to make sense.
4. Plan well for post-integration – Who’s to be responsible for ongoing assurance and testing? Who will own the maintenance, calibration, and change management processes? How will higher leadership remain apprised of key management information?

Payment Screening Features that Support Integration

It’s also crucial to consider whether a firm’s payment screening solution has the right capabilities to integrate effectively with the wider compliance process. When evaluating an existing or new screening solution, I encourage firms to consider three key factors. 

First, the solution should be optimized for a wide range of integration scenarios. Firms can look for configurable workflow capabilities to suit their teams’ ways of working and audit-logging that reliably records important information – including actions taken, issue owners, and comments provided. 

Second, the system should be able to process risk data efficiently. Data-optimized screening algorithms should allow firms to process most payments without analyst intervention. By avoiding backlogs of low-risk alerts, teams will maintain the flexibility to apply a risk-based approach – for example, focusing more closely on payments made by higher-risk clients.

Third, it’s vital that the data being integrated is reliable. System-wide updates should quickly reflect changes to key sanctions lists. When crises occur, firms need to know they’re screening against the most recent information. Screening vendors should perform automated ingestion of updates and back them up with human assurance processes.

The easier a solution is to integrate and implement without any data ingestion complexities, the faster firms can scale their business without adversely impacting cost or risk.

For more insights from our global survey, and practical tips from our Regulatory Affairs team, download The Role of Technology and Talent in Transaction Screening.