The client is a global bank that needed a comprehensive sanctions screening solution in payments processing. This solution would block funding for terrorist activities, money laundering, and the drug trade; in line with governments’ lists of sanctioned entities. Every payment processed by the bank had to be checked against these sanction lists.
Allowing a payment to sanctioned entities can result in hefty penalties. Constantly changing sanctions lists complicate the process. The biggest compliance challenges for the bank were identifying and blocking payments for sanctioned entities despite name variations (abbreviations, spelling changes, phonetic variations, middle names), and protecting genuine customers with names similar to sanctioned entities.
Sanctions compliance is tricky, risking the troubling of a genuine customer with some similarity to sanctioned entities (false positives), or wrongly allowing a payment to sanctioned entities (false negatives).
Our clients’ United States Dollar (USD) payments clearing operations team required a solution that used artificial intelligence/machine learning to analyze thousands of alerts generated from initial name matching between payment details and government issued sanctions list.
The payments data include each transaction’s detailed information on sender and receiver, beneficiary, payment type, transaction amount, order party, and transacting banks’ details. The sanctions list includes textual information of entities that have been blocked by the government. Any transaction linked to the sanctioned entity should not be released. To achieve this, our team deployed a DeepInsightsTM based AI engine, which did the following:
• Resolved false positives using natural language processing, machine learning, and deep learning
• Recognized similarities in names based on abbreviation, jumbling of names, similar sounds, and spelling variations
• Distinguished between the name of an individual, name of an organization, and entity name from entity address
Our innovative solution allowed our client to experience the following benefits:
• Higher accuracy: 100 percent recognition of sanctioned entities
• Quicker clearance: 80 percent reduction in processing time
• Better consistency in decisions: 90 percent more coherent
• Lower costs: 50 percent reduction in manual effort
• Higher customer satisfaction: 5 percent improvement
• Greater adaptability: The solution learns as it screens more payments, becoming better with time