Sanctions testing service from Swift and Omnicision

20 July 2012

Swift is partnering with Omnicision to deliver a real-time sanctions testing service in September 2012 that will be automated and can test that the correct filters are in place quickly, with the aims of helping banks and corporations operate a simpler and compliant cross-border sanctions environment. The announcement is timely following the huge US$1bn fine imposed on HSBC by the US regulators recently for consistently failing to screen out banned payments to drug smugglers, Iran and other proscribed countries across its own and correspondent banking networks.

The need to test compliance with sanctions requirements has never been so visible. Banks can be exposed to significant fines and costly remedial actions for sanctions control failures, as the recent HSBC case illustrates. The affair cost David Bagley, the ex-global compliance officer of the bank his job after he resigned in front of a US Senate inquiry on 17 July.

For global banks and indeed corporations, multiple sanctions lists are needed and these evolve daily, so screening systems have to be precisely tuned in order to deliver operational and detection effectiveness.

The Swift sanctions testing service, developed with Omnicision, has access to the financial messaging provider’s 10,000 financial institution users and corporations, spanning 212 countries. The partners claim this partnership between scope and proven monitoring and filtering software will enable users to measure the effectiveness of their systems and reduce their number of false positives. Employee assistance in setting up the testing procedures and aligning them with a user’s risk appetite is also available.

According to the partners, the application is the first that fully automates the creation and maintenance of test data and result analysis in this area. Users will be able to manage their own testing programme and produce performance reports down to the smallest detail. The application also provides real-time alerts and navigation on changes to sanctions lists. It is scheduled to go live in September 2012. The launch is intended to complement Swift’s existing sanctions screening service, which was unveiled earlier this year, with a test functionality.

Commenting on the deal, Nicolas Stuckens, manager of anti-money laundering (AML) and sanctions initiatives at SWIFT, said: “The testing service addresses the growing operational challenges for global organisations that have to strike a careful balance between the amount of resources [spent] reviewing alerts and the risks of not meeting regulatory requirements.”

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