It is the process of analyzing, verifying and checking incoming and outgoing transactions. This method reveals the risk of inaccuracies or criminal activity in any payment transaction. This allows financial institutions to act quickly in reporting an illegal transaction or processing any payment.

Companies often follow this method comply with global anti-money laundering and terrorist financing regulations and to protect their customers and themselves from criminals’ attempts to transfer money. Many organizations should have the capacity to scan all types of digital transactions, from standard credit card transactions to fast payment systems such as FedNow and Instant SEPA credit.

Payment screening is the process of checking incoming and outgoing transactions. It determines whether they are risky or violate regulatory standards. The main objective is to verify payment information and identities and to identify suspicious transactions for further investigation.

What is the difference between payment screening, transaction monitoring and transaction screening?

These are two separate processes that financial institutions perform at different times and for different purposes. Payment screening is a thorough vetting process that financial institutions conduct before processing any payment. This process verifies the identity of the sender and receiver. It checks whether they are on international sanctions lists through a process called name screening and examines whether the payment complies with legal regulations. It is critical to ensure the security of the payment and comply with legal regulations.

Transaction monitoring is a process where institutions track and analyze customer transactions. Transaction monitoring is usually implemented through real-time or retrospective analysis. The aim is to prevent crimes such as fraud and money laundering by detecting unusual activity in customer transactions. In this process, financial institutions intervene by automatically or manually identifying suspicious transactions with predefined algorithms and rules. Transaction monitoring plays an important role both in complying with legal regulations and protecting customer data.

 The main features of a payment screening process

1. Specific Risk-Based Approach (RBA): As with many AML/CTF operations, businesses should translate their risk tolerance into procedures with clear boundaries. It should be clear what needs to be done and when this can change.

2. Clean, Up-to-date and Linked Data: In order to make the best decisions with screening, it is essential for businesses to have confidence in data such as customer histories, third-party inputs, and enforcement data. This is especially important when automating the payment screening process.

3. Updated Staff Training: Employees who automate the screening process and manage exceptions must be up to date on current procedures and regulations. It is equally important that this training is continuously updated and aligned with the risk-based approach of the business.

5. Easy to Use, Smart Technology: Payment screening software must be ready for management to manage cases just as quickly when data is updated quickly. This requires a combination of automation and interface design.
6. Continuous Audit Processes: In order to improve the payment screening process, a new function dedicated to auditing businesses is needed. By identifying weaknesses and recommending changes, these improvements can be implemented quickly.