Applying Next-Generation Technology to Sanctions Compliance Programs

Whether it is bribery and corruption, fraud, anti-money laundering, or insider dealing, financial crime is a global problem. Detecting, and ultimately preventing, financial crime is rapidly becoming one of the greatest compliance challenges for many organizations—impacting not just monetary losses but reputation, brand, culture, relationships and regulatory censure. According to Vikas Agarwal, Partner, PwC US, Financial Crimes Unit Leader, ‘fraudsters are constantly adapting their schemes to make detection by traditional fraud models more difficult. Meanwhile, regulators expect financial institutions to leverage the best technology available to improve their fraud management programs.’ 

It is more important than ever to have a sophisticated, flexible tech-powered approach in place that reflects your culture, needs, and issues, and that addresses connections with related areas of financial crime. Compliance programs must use robust technology and data analytics to assess their own actions and those of any third parties they do business with. At the very least, companies are expected to be able to explain the rationale for using third parties. Historically, organizations could argue that they simply did not have the information available to identify potential compliance dissonance across their networks: the “needle in a haystack” defence.

According to the IDC Technology Spotlight, sponsored by PwC, ‘Applying Next-Generation Technology to Sanctions Compliance Programs’ (November 2021, #US48329121) ‘Advancements in trustworthy, responsible artificial intelligence (AI) now enable financial institutions to move beyond the outdated legacy technologies that plague compliance teams with inefficient alert triage processes. Investments in AI-based alert triage can produce more efficient and accurate outcomes, enabling institutions to establish a more competitive position in the future.’