In the highly regulated financial sector, ensuring compliance with sanctions regulations is paramount. Financial institutions send and receive hundreds of thousands of messages daily, making it critical to confirm that the right messages are screened. Failure to meet screening obligations can result in severe regulatory penalties, reputational damage, and financial loss.

OpusDatum provides assurance that organisations are effectively screening the correct messages, mitigating compliance risks and ensuring regulatory adherence.

Our Client

Our client is a global financial services provider engaged in retail, corporate, investment banking, and wealth management. With a significant international presence across Europe, the Americas, Africa, and Asia, the client operates in a complex regulatory landscape requiring stringent sanctions compliance.

The Challenge

To serve its global customer base, the client moves, lends, invests, and protects money worldwide. It must comply with sanctions regulations by screening payment messages against sanctions lists, such as the Office of Foreign Assets Control (OFAC) and HM Treasury (HMT) lists. The client’s sanctions policy determines which payment messages require screening and which lists to check them against. Typically, domestic payment messages are excluded from screening, but it is crucial that all required payments are correctly identified and screened.

Risk owners needed assurance that all necessary payments were being sent to the sanctions screening filter. However, as the policy was implemented through business interpretations and technology teams embedding rules into payment systems, there was a risk of misalignment with the sanctions policy. The client engaged us to identify potential screening gaps and conduct a root cause analysis to understand any deficiencies in their sanctions screening process.

Our Approach

Using our proprietary sanctions screening completeness testing methodology and LinkPro tool, we conducted an end-to-end investigation. Key steps included:

• Understanding the Payment Messaging Ecosystem: We began by conducting a comprehensive review of the client’s payment messaging systems. Given the complexity of the client’s global operations, multiple systems were in place to handle financial transactions, each with its own configuration and data flows. We assessed these systems to determine which were within the scope of our review.

• Extracting & Processing Data: For each in-scope payment system, we extracted several million messages from the client’s data warehouse. These payments were then loaded into our review database, ensuring they were in a structured format suitable for analysis.

• Reviewing the Sanctions Policy: We examined the client’s sanctions policy to establish a clear set of screening rules. This included identifying which payment messages should be screened and against which sanctions lists. By aligning with the client’s risk appetite and regulatory obligations, we ensured our methodology accurately reflected the required screening criteria.

• Applying Screening Rules to the Extracted Payments: Using our review database, we applied the established sanctions screening rules to the extracted payment messages. We made independent determinations regarding whether each payment required screening based on the policy. This step ensured objectivity and accuracy in the assessment process.

• Analysing Sanctions Filter Logs: To verify that payments requiring screening were indeed processed correctly, we extracted logs from the client’s sanctions screening filters. We searched for evidence that each payment flagged for screening was present in the logs.

• Identifying & Documenting Screening Gaps: We identified payments that should have been screened according to the policy but were missing from the sanctions screening filter logs. These instances were documented as potential screening gaps.

• Conducting Root Cause Analysis: For each exception, we conducted an in-depth investigation to determine the root cause. This included analysing the client’s complex payment message routing algorithms to understand why certain payments were not included in the sanctions screening process.

• Reporting & Assurance: Finally, we compiled our findings into a detailed report for risk owners and senior management. This report highlighted sanctions screening deficiencies, explained their underlying causes, and provided actionable recommendations to improve compliance and reduce risk.

Key Benefits & Measurable Outcomes

Through our comprehensive investigation, our client gained confidence that its sanctions screening process aligns with its sanctions policy. Senior management and key stakeholders now have enhanced visibility over a previously opaque process, allowing them to demonstrate compliance effectively.

Additionally, the insights we provided allowed our client to implement targeted enhancements to its sanctions screening processes, improving efficiency and reducing operational risks. The identification of root causes for screening gaps enabled our client to refine its payment system configurations, update policies, and strengthen internal controls to prevent future compliance breaches.

As a result, the organisation is now better positioned to respond to regulatory audits and inquiries with documented evidence of compliance. By addressing vulnerabilities proactively, our client has not only minimised regulatory and financial risks but also reinforced its reputation as a responsible financial institution committed to robust compliance practices.

Ensure Your Sanctions Compliance with OpusDatum

Regulatory compliance is non-negotiable, and ensuring your sanctions screening process is watertight is essential. OpusDatum’s advanced screening assurance solutions can help you gain clarity, reduce risk, and maintain compliance with confidence. Contact us today to learn more about how we can support your organisation.