A quick and easy way to check bank transactions against sanctions lists
Financial institutions are facing increased pressure from regulatory agencies around the world to fight against money laundering tactics, which are linked to terrorist financing and criminal activities. Sanctions screening tools help banks comply with these regulations, but the proprietary set up of such tools means that implementation can be lengthy and costly, especially for small and medium-sized banks working on a cross-border basis.
Why choose SWIFT Sanctions Screening
- Quick implementation and automatic updates
- Cost-benefit and subscription service
- No hardware or software to install or maintain
- Real-time screening of all transactions
- Allows concentrating efforts on essential activities
In August 2014, CCB announced the acquisition of the Banco Industrial e Comercial (BicBanco). CCB is China’s second largest commercial bank and the fourth largest in the world according to market value ranking. BicBanco, a family-owned bank founded in 1938, was one of the largest medium-sized banks in Brazil, focused on providing credit to companies in the middle market segment. Upon the procurement of BicBanco, the new entity was renamed as CCB Brazil and it became the largest Chinese banking interest within Brazil.
With newly forged ties to Asia, the globalisation of BicBanco attracted the attention of both Brazilian and international regulatory agencies. "We were already concerned about having a filter for sanctions, but the fact the bank had turned global brought additional pressure from mainly the Brazilian regulatory agencies, as well as other international regulatory agencies," commented Eládio Ibiapina Bezerra, CCB’s Superintendent of Information Technology.
In addition to the external pressures, CCB’s head office was internally pushing CCB Brazil to become more compliant with international laws and parameters. “The Chinese called 2015 the ‘Year of Compliance’ and 2016 the ‘Deepening of Compliance,” says Bezerra.
Making the decision
After a rigorous assessment of sanctions tools, CCB Brazil chose SWIFT Sanctions Screening, a service providing a filter for sanctions lists accessed through web-based technology. “We started looking for a market solution about five years ago, but the only options available proved to be very expensive,” Bezerra remembers. “We reached out to SWIFT last year as we had worked with them in other areas of the business. We found out that they had a more cost-efficient solution. Considering all the investments involved, the cost of SWIFT Sanctions Screening represented only 31% of the total amount quoted by the competing company.”
Since its launch in 2012, more than 800 financial institutions of all sizes worldwide have chosen SWIFT Sanctions Screening. The tool comes with automatically updated and unrivalled list coverage from all the main regulatory agencies, including OFAC, the United Nations, and the European Union.
Cost was not the only driver for the bank’s decision, with implementation time also being a critical factor. According to Bezerra, CCB Brazil made a commitment with the national regulator to deploy the new system.
For competing services, the entire process – from bureaucracy to implementation – would have taken at least five months. With SWIFT’s tool, it was accomplished in only two months.
Fast implementation and simple usage
CCB Brazil engaged with SWIFT’s consultancy team to support the CCB’s users with implementation. SWIFT teams from New York, Miami, and Brazil provided training for the CCB team that would be dealing with SWIFT Sanctions Screening on a daily basis. In addition to training, SWIFT performed weekly follow-up meetings to closely assist the CCB team throughout the entire process. “This was instrumental for us to be able to meet the deadline,” says Bezerra.
According to Alberto Nunes, the SWIFT Country Manager responsible for overseeing the implementation process, the success was also due to the efforts of the CCB Brazil team. “Only one meeting was required with the compliance team to allow them to start using the SWIFTSanctions Screening tool,” he recalls. “Our main challenge was to meet the deadline with all of their staff ready and fully trained. After implementation, the team’s expertise evolved very quickly. The tool is very user-friendly,” added the IT Superintendent of the CCB. “SWIFT Sanctions Screening users benefit from a standardised solution that is compliant and updated with the latest sanctions lists,” states Nunes.
Building trusted relationships
According to Bezerra, CCB was already familiar with SWIFT Sanctions Screening as the Beijing headquarters and several other subsidiaries around the world had already been using the tool for a number of years. With the acquisition by China’s CCB, the process involved in the filtering of transactions and the verification of clients according to Brazilian sanctions lists needed to change. “We used to handle the check manually, but the volume was much smaller and reactive at BicBanco,” Bezerra says. Despite currently dealing with relatively small volumes, CCB Brazil is working proactively to ensure it is equipped for projected higher volumes over the coming years due to increased international financial trading by Chinese companies.
The CCB was one of the first banks to adopt and implement the SWIFT solution in Brazil. In a scenario where regulatory pressures are increasing, the investment in Sanctions Screening places the institution in a much better position to deal with transparency and compliance - essential for maintaining positive and effective relationships across the world. “Having SWIFT Sanctions Screening has enhanced the bank’s reputation, and we think we have become more trustworthy in the eyes of the other banks,” stresses Bezerra.
Ever since the bank began using SWIFT Sanctions Screening, CCB Brazil has seen a number of significant benefits. Quick implementation and low cost were the first two factors that impressed the financial institution. “In order to implement a similar service ourselves it would have been necessary to buy and install servers and software and then license them. We realised that we would be wasting man-hours if we chose to build an internal solution,” Bezerra commented.
Because SWIFT Sanctions Screening is web-based, only a minimal amount of software was required. Not only is the need to invest in additional hardware and software eliminated, so are the costs associated with installing and running local data centers. “We did not face high costs when implementing the infrastructure,” said Bezerra. “SWIFT Sanctions Screening gave us the opportunity to implement the solution as a service.”
SWIFT Sanctions Screening is used by clients in over 140 countries. The solution is specifically designed to meet the needs of small and medium-sized financial institutions, as well as Central Banks and large companies involved in high payment volumes.
With more than 30 years of experience in the IT sector of financial institutions, Bezerra encourages more institutions to acquire the SWIFT service. “I recommend it,” says the IT Superintendent of CCB Brazil, “because it is easy to use and requires minimum effort to implement, over and above the time-saving factor and the usability of the tool itself.”