The Value of APIs in Sanctions Screening

by James Ferguson

Consumers’ demand for instant, seamless services is growing with fervor. This fundamental shift in expectations has changed the game for money services businesses (MSBs), whose technology must keep pace with not only customer demand, but also the requirements of regulators devoted to governing an increasingly complex sanctions compliance framework.

Failing to comply with today’s sanctions screening regulations causes more than reputational damage. For companies caught dealing with a blocked entity on the Office of Foreign Assets Control’s (OFAC) Specially Designated Nationals (SDN) List, the financial penalty now often reaches into the millions. And it seems regulators are putting the hammer down: OFAC has imposed $1.2 billion in fines already in 2019.

Sanctions Screening Grows in Complexity

The purpose of OFAC’s SDN List hasn’t changed since its inception: to prevent U.S. citizens and companies from engaging in business with potential terrorists, money launderers, and any other persons or entities deemed enemies of the United States.

However, since the turn of this century, several factors have vastly increased the complexity of the watch list screening for MSBs:

• A Globalized Customer Pool: Digitization enables more organizations to reach beyond our
  borders to serve a continuously expanding customer base.
• Customers Want “It” Now: Consumer and commercial customer habits are changing in tandem with commerce. Immediate transactions are expected, and often demanded.
• Data Overload: Due to the proliferation of affordable cloud-based technology, firms are using more systems that automate key operational functions—and generate vast amounts of data. As a result, many businesses have customer databases spread across different departments.

These complexities increase watch list screening risk for MSBs, and complicate compliance efforts for all organizations—from large, sophisticated conglomerates to family-owned and local businesses.

So, how are businesses dealing with the growing intricacy of sanctions screening? Luckily, application programming interfaces, or APIs, are helping in a big way.

APIs Simplify Sanctions Screening for MSBs

The ability to incorporate APIs into a company’s sanctions screening program is a game changer—vastly simplifying the watch list screening process. APIs facilitate full integration between otherwise separate systems. In other words, APIs can help your watch list screening solution communicate across your organization’s various systems.

And that’s not all. With APIs incorporated into your watch list screening solution, businesses see a unified, cohesive view of compliance across their entire organization, due to the following:

• Integrated Incoming Data: All watch lists relevant to your risk profile are available to your business from one hosted environment that provides immediate, real-time access.
• Interacting Integration: All of your relevant technology is seamless, including customer onboarding, transaction payments, and vendor-related systems.
• Consistent Integration: Your business receives consistent, real-time screening, delivered against multiple internal databases across your enterprise.
• Up-to-date Watch Lists: No matter when or how often you screen, the solution continuously monitors, gathers, cleanses and deploys list updates in real time.
• Simultaneous Screens: No matter how many separate watch lists your business needs to screen against, the solution allows you to screen them simultaneously via one data integration.
• Real-time and Retroactive Capabilities: You can screen by individual, non-individual, sanctioned country, type unknown or exact ID at the time of the transaction, as well as retroactively.
• Single or Batch Lookups: You can conduct single and batch lookups in real time.
• Non-disruptive Transactions: API-fueled solutions not only ensure that your business transactions flow uninterrupted, but also deliver a notification of possible matches for further investigation.

Learn More About APIs in Sanctions Screening

When you automate watch list screening with an API-powered solution, your business can counteract the complexity of 21 st century sanctions compliance. To learn more about APIs in sanctions screening, download our Fueling Modern Risk Mitigation with APIs white paper.

James Ferguson has been with CSI for 10 years, and currently serves as vice president of the regulatory compliance group.