Last week, the banking community gathered in person again for SIBOS, the largest global financial services networking event organised by SWIFT. Many sessions focused on reducing friction in payments. Today’s complex geopolitical landscape meant that sanctions – a major source of friction – were top of mind for many in attendance.

As the financial industry moves online, so do counterparty interactions and payment flows, with their associated risks and regulatory obligations. Customers of digital platforms understand the importance of a rigorous compliance process, but they also want their experience to be frictionless. They expect to sign up and be able to transact without hindrance. 

Speaking with compliance officers at SIBOS underscored the industry’s vast sanctions screening challenges. Many institutions have struggled to keep up with the high-pace waves of sanctions that US and European regulators have rolled out since February. Many also found their screening solutions were not flexible enough to translate each new sanction program into configuration items without significant disruption to their operational workflows.

So, while SIBOS was all about reducing friction thanks to new formats and technologies, many banks are experiencing more friction due to heightened sanction checks. This is prompting renewed interest in more scalable, flexible approaches to screening, enabled by the cloud, fueled by analytics, and powered by AI.

Some banks are already taking action to achieve the capabilities they need to overcome their sanctions screening challenges, while also reducing friction for their customers. As announced at SIBOS, Orange Bank teamed with SAS and Neterium to implement real-time sanctions screening, for both the customer onboarding and payment workflows.

According to Orange Bank’s Deputy CEO, Veronique McCarroll, the newly deployed AML-CTF platform’s built-in AI and advanced screening technologies are helping improve detection relevance. They are also allowing the bank’s analysts to monitor a holistic, real-time view of AML risk. These advances will make the bank more agile in responding to ever-evolving lists and regulatory guidance.

Today’s highly dynamic sanctions climate brings significant risks – but also tremendous opportunity. The accelerated digitalization that’s happened amidst the pandemic will ultimately help financial institutions overcome the vexing sanctions screening challenges that have plagued the industry for decades. We look forward to returning to SIBOS next year to marvel at the leaps many financial institutions will make in the year ahead.