Watchlists are databases that include searches for suspected terrorists, money launderers, fraudsters, and PEPs. They are being stored internationally at governmental levels about information collected at the governmental level, law enforcement databases, international databases, and regulatory databases about prohibited individuals or corporations in industries such as finance, healthcare, and agriculture.

What is Global Watchlist?

A global watchlist contains the names, details, and other pertinent information of targets selected by government authorities for punitive measures. Sanctions watchlists differ in structure and data, therefore businesses must adjust their screening procedure to acquire enough information about a designation to decide about a customer’s status.

Targets on watchlists may have been named as a result of actions performed by them or their governments, such as terrorism and terrorist financing, human rights violations, treaty violations, arms trafficking, drug trafficking, and cybercrime.

Sanctions Watchlists are often made public and accessible online so that corporations can easily consult them. Watchlists are frequently comprised of thousands of names, many of which are similar in spelling and pronunciation: with this in mind, watchlist searches may present a significant administrative burden, and firms may be forced to rely on automated screening software to perform their checks effectively.

Watchlist screening systems used by financial institutions (FIs) retrieve exact data from a variety of sources, including:

• The Office of Foreign Assets Control (OFAC) sanctions list and the European Union’s consolidated sanctions lists (EU).
• Interpol and other intergovernmental and state-specific entities maintain databases.
• Supervisory authorities and independent regulatory bodies, such as the SEC and FINMA, give information on greylists and blacklists including the names of non-cooperative countries notorious for money laundering. Individuals from these nations have been classified as high-risk.
• Lists of information about Politically Exposed Persons (PEPs) from around the world.

How does it work?

Watchlist screening is a reliable method of conducting identity verification on a consumer. A financial institution’s AML program considers all relevant information from a variety of watchlist sources to conduct a thorough screening of the customer. The client’s name is checked against the data in the lists to see if they are a criminal, have any linked associations, or possess any type of governmental authority. This enables corporate entities to determine the level of risk and the sort of services that the client will or will not receive.

As a result, it does identification verification from numerous independent sources utilizing reputable data before notifying your organization. The system then searches persons from several watchlists, including global and governmental ones.

Advantages of Watchlist Screening

The benefits of watchlist screening are as follows:

• Customer onboarding becomes faster and more efficient as manual work is decreased significantly, resulting in a reduction in compliance departments’ workload.
• When watchlists are updated, your institution is notified so that it may stay up to date on the most recent compliance standards and watchlists.
• Watchlist screening optimization results in conformity with all government legislation and watchlists.
• Protection against genuine frauds, criminals, terrorists, and particularly designated nationals reduces false positives and financial and reputational harm to your organization.