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Swift Considers Client Name Screening Service Based on Sanctions Screening Managed Service Model

Swift has extended its sanctions screening service to support all financial transaction formats and is considering the feasibility of using a similar managed service model to build a client name screening solution that could support banks’ client onboarding and Know Your Customer (KYC) processes.

Extensions to Swift’s sanctions screening service cover batch SEPA payments and the Fedwire transaction format, as well as transactions sent over networks other than Swift. The service uses a screening engine and sanctions list management to screen transactions against more than 30 sanctions lists and alert banks to any concerns arising from screening.

Nicolas Stuckens, head of sanctions compliance services at Swift, explains: “Drivers behind the extension of the sanction screening service are the need to screen message types other than those using the Swift FIN messaging format and the need to screen SEPA transactions. These transactions require a different screening process to individual transactions as they come in batches and use the XML format. To screen SEPA payments we have broken down the batches into individual transactions and are screening them closer to the back office before batches are created and sent.”

The sanctions screening extensions went live at the end of last year. They can be accessed by existing users of the service and, Stuckens hopes, new subscribers that can benefit from a service that supports all transaction formats and eases the data management burden of screening by aggregating and continuously updating multiple screening lists from different sources and in different formats.

Based on the concepts behind its transactions screening model, Swift is starting to look at the design and feasibility of building a managed client name screening service in-house or on the basis of vendor technology – the organisation’s sanctions screening service is based on FircoSoft technology. Stuckens says Swift members are expressing interest in a client name screening service, but notes that while a client name is an important part of client onboarding and the KYC process, it is only one step in the process, with others including risk rating, due diligence and monitoring activities.

He explains: “We do not have plans to provide a full client onboarding and KYC service for individuals and entities, only the name screening part of it. Swift has introduced a KYC Registry that currently focuses on correspondent banking and provides the documents required for banks to perform due diligence on their correspondents. The KYC service does not provide screening capabilities, although screening would be a natural extension if we do, in future, have a name screening service.”

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