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Sanction screening for Instant Payments
A technology perspective
The last few years have seen the emergence of a new payment instrument: instant payments. Instant payments allow people to transfer money from one account to another account at any time of any day within a few seconds.
While they do not offer yet the same ubiquity nor handle the same volumes as more traditional low-value ACH (Automated Clearing House) or correspondent banking payments, their take-up has been remarkable. At this stage, more than 60 markets already have live instant (or real-time) payments infrastructures whose take-up differs based on their maturity (e.g., UK Faster Payments was a precursor which went live in 2008 and processed more than 3 billion instant payments in 2021). While most of these systems focus on processing domestic payments, several initiatives are also on-going to open up these instant payments to process cross-border flows (e.g., RT-1 and TIPS are examples of pan-European instant payment systems).
While consumers and business will directly benefit from this new payment instrument, it also comes with significant challenges for financial crime compliance teams in terms of how to handle the related sanctions screening aspects. These include deciding which of these instant payments should be screened (based on each bank’s specific context, risk appetite and policies) and implementing the appropriate technology solution to efficiently process the expected large volumes within the very limited time allowed.