Newly published by SWIFT and endorsed by the Payments Market Practice Group, these screening guidelines can help compliance professionals harness the true power of ISO 20022’s richer data.
The financial industry is making monumental strides to change the way that cross-border transactions are managed – accelerating speed and efficiency while also ensuring greater predictability.
Compliance checks act as an important line of defence against fraud, money laundering and terrorism financing – maintaining integrity within the financial system and eliminating threat actors. Within sanctions screening, poor quality data leads to false positives and requests for information in the bank-to-bank message chain, and ultimately results in transaction delays and a failure to meet customer expectations. That’s where ISO 20022 can help, providing richer and more structured data to keep our industry moving forward.
Collaborating with our community
SWIFT, in collaboration with the banking community, is undertaking a programme of initiatives to ensure the compliance ecosystem can fully benefit from the adoption of ISO 20022. This includes designing and implementing screening guidelines and data quality principles for ISO 20022 through industry collaboration.
Representatives from 14 global and regional banks took part in a series of workshops, assessing the message structure with the purpose of defining:
- Which ISO 20022 elements should or should not be screened
- How to best match these elements against sanctions lists
- Which data quality principles should be observed to support effective and efficient screening
Based on these workshops and a careful analysis, we’re proud to publish the first set of guiding principles for screening ISO 20022 messages, fully endorsed by the Payments Market Practice Group.
Leveraging the move to ISO 20022
“The new ISO 20022 standard provides more structured and granular information than FIN messaging, including the ability to include additional information,” says Matt Hobbs, Head of Financial Crime Compliance Strategy at SWIFT. “This creates an opportunity for the industry to rethink current screening approaches. These guiding principles are designed to help compliance teams leverage their migration to ISO 20022 and enable a more targeted approach for screening financial transactions, to help reduce false positives and friction associated with sanctions.”
The targeted screening principles described in this document represent a ‘target state’, as defined by the industry, based upon mature adoption and stable data quality of ISO 20022.
“It is therefore important that financial institutions adopt a risk-based approach to implementing these guiding principles, in line with their own risk appetite observed ISO 20022 adoption,” concludes Hobbs.