Case Studies

Financial Crime Sanctions Look-Back

In 2016, RedCompass managed an in-depth health-check of our client’s sanctions screening effectiveness, meeting the stated compliance objective and making a cost saving of over 90% of the cost of outsourcing the work to a ‘Big 4’ consultancy.

 

Context

  • Key names were dropped from key sanctions lists before screening by a major bank who, upon discovery of the problem, needed to confirm if transactions had been conducted with sanctioned entities
  • A ‘Big 4’ consultancy proposed a multi-million pound mini-project involving setting up a test lab outside of the client premises to investigate the problem
  • RedCompass delivered an alternative solution that was significantly more cost effective

 

RedCompass Approach and Solution

RedCompass proposed and managed an efficient model to perform the technical reviews within the client’s test environment in conjunction with certification by a third party to make significant cost savings, following our three-stage process:

 

 Stage 1 – Triage: “Is there a problem?”

  • RedCompass managed comprehensive testing of thousands of test cases covering all domestic, SEPA and international payments covering multiple payment platforms and sanction systems
  • The investigation identified a number of gaps in the current sanctions screening process, such as data truncation and system deficiencies in screening sanctioned entities

 

Stage 2 – Look-Back: “What is the problem?”

  • Conducted a look-back exercise over 3 years of the bank’s transactions to assess whether any had been made to sanctioned entities
  • Conducted a look-back across all EU branches to ensure compliance with US law on Data Transfer to identify where instances of beneficiary country names had been dropped prior to screening
  • Conducted a health-check across all EU branches for international remittances, revealing a major defect in the screening process where names but not country codes were being screened
  • Conducted a lookback exercise for 2 years of transaction history for ‘at risk’ branches of the bank in a ‘vault environment’ to ensure deficiencies in compliance processes and systems have not resulted in sanction breaches for DFS, OFAC, PRA, FCA and DNB

 

Stage 3 – Remediate: “Fix the problem”

  • RedCompass is currently supporting a 3-year transformation programme to overhaul sanction screening process and systems across 83 branches of the bank