On June 4 the annual EBA Seminar was held in Tel Aviv, Israel, for compliance officers and financial institutions senior management. The Seminar covered the hottest topics of AML/CTF.
Gideon Drori, Co-Founder and CEO of Fincom, was invited by Matrix, one of Fincom’s global partners, to address the Israeli financial community. Matrix is currently putting a special effort into expanding Fincom’s presence on the Israeli market.
Drori spoke about the latest trends in the regulatory compliance arena, and about the challenges and solutions for efficient sanctions screening.
The requirement to carry out sanctions screening in the language of origin, using original scripts, is one of the current global trends that necessitate the use of a system capable of “understanding” names in multiple languages. OFAC, UK, EU, UN, and SWISS consolidated sanction lists now include names (individual, geographical, companies, etc.) in multiple languages, including Russian, Chinese, Arabic, and many more. The ability to screen these names in the language of origine is not only beneficial for the screening accuracy but will also soon be required by regulators worldwide.
The fast pace of technology advancement leads to еру widespread use of Instant Payments, which also means that sanction screening must be carried out in real time. The use of a system that supports multilingual screening is paramount (among other things) for decreasing the number of false alerts that result from numerous possible translations and transliterations.
For more information on the regulatory requirements for multilingual sanctions screening click here.
Drori explained the importance of adjusting Israeli sanctions screening systems to the global requirements, since any financial institution that trades through NYC is subject to the corresponding regulations and must adjust its systems to meet the regulatory compliance requirements. So, all Israeli banks that manage financial transactions in the US are subject to these global regulations. As such, the banks may become the subject to their compliance systems check, including systems’ calibration.
An interesting open discussion about the importance of the use of fuzzy logic threshold took place. Drori gave real-life instances to demonstrate why it is important to consider a wider threshold.
In the document A Framework for OFAC Compliance Commitments, Department of the Treasury gives real-life examples, where higher thresholds of 90-95% would fail to recognize and flag names and geographies that utilize alternative spellings. E.g. Habana vs. Havana, Kuba vs. Cuba, Soudan vs. Sudan.
For more information read about Fincom’s AML solution for Banks and FI’s
