Christopher Hughes
The payments industry operates against a backdrop of pervasive global financial crime, but effective, efficient payment screening can help you detect potential risk early. What does a best-practice approach to payment screening look like?
- The global payments space is evolving at pace, but financial crime risk within the sector is also rising.
- A best-practice approach to payments screening can help you identify risk early in the game.
- A proactive, rather than a reactive approach is essential, since identifying a breach after the event is simply too late.
Managing evolving payments risk
The payments industry continues to evolve at speed, with consumers across the globe drawn to the speed, efficiency and always-on connectivity offered within the payments space. Alongside this evolution, however, financial crime risks are rising, with sophisticated criminal activity – especially around account takeovers, synthetic identities and deep-fakes – driving risk levels.
Payment service providers need to manage this evolving risk by identifying potential risk early in the game. Speed is of the essence, given the nature of the industry – and customers have grown accustomed to quick, seamless online transactions.
In the instant payment space specifically, being able to verify payments in real time is essential, and on top of this, customer-facing processes need to be low-friction to minimise abandonment.
Payment screening is the vital first step that can identify risk early, but what does a best-practice approach look like?
A best-practice approach to payment screening
Five key elements that can help you develop a best-practice approach and maintain an efficient, effective payment screening programme include:
Ongoing monitoring
Given the dynamic nature of financial crime, ongoing monitoring of any payment screening programme is essential. New risks can emerge as financial criminals continually find new ways to leverage advanced technology to commit fraud.
Regularly analysing the effectiveness of your payments screening programme to identify any weaknesses or gaps, and then making any necessary adjustments, can help you mitigate this dynamic risk.
Keeping pace with change
Keeping abreast of changes in the regulatory landscape – as well as relevant industry developments – is crucial.
The regulatory landscape is fluid, and this means that it is essential, for example, to monitor updates to sanctions lists and understand and track AML regulatory changes. This will help to keep you ahead of the regulatory curve.
At the same time, keeping pace with payment screening technology advancements can help you to implement a proactive approach to updating and optimising your payment screening programme.
Leveraging technology and automation
Payment screening technology continues to evolve, bringing ongoing innovation to the payments space. Leveraging these new developments as they become available is an essential step in keeping your payment screening programme in line with a best-practice approach.
Incorporating technologies like AI and machine learning, can offer a wide range of benefits, from improving accuracy, to boosting efficiency and delivering seamless customer experiences.
Automation can streamline workflows, reduce manual errors, and free up staff resources for higher-value tasks, such as investigating potential matches or analysing complex risks.
Investing in ongoing training and development
Ongoing employee training is vital for maintaining and enhancing your payment screening programme.
A proactive approach involves regularly updating your training materials to reflect the latest regulatory requirements and industry best practices, and encouraging employees to participate in industry conferences, workshops and webinars to keep them informed about emerging trends and developments.
Developing a continuous improvement mindet
Embracing a continuous improvement mindset is key. You should view your payment screening programme as a set of dynamic processes, and should regularly evaluate the effectiveness of your screening, proactively identifying areas for potential improvement and implementing changes as they are needed
It is important to foster an organisation-wide culture of innovation and collaboration and to encourage all employees to contribute their insights and suggestions for improving payment screening processes.
Be proactive, not reactive
Maintaining and enhancing your payment screening programme is an ongoing process that requires a proactive rather than a reactive approach.
The fast-paced nature of the global payments industry means that detecting potential risk in real time is essential – discovering a breach after the event is simply too late.
By continually striving to remain in line with both regulatory changes and evolving industry best practice, you can implement a payment screening programme that ensures compliance with global sanctions and AML regulations, and protects your organisation against pervasive financial crime in the dynamic payments space.
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