‍KEY CHALLENGES

A bank performs sanctions screening using some third-party software. Although the screening system appears to be working in that output is created, but the bank quite rightly wants to know if its system: addresses the bank’s risk, is effective, is efficient, is comparable to peer banking institutions.

The bank requires:

• A benchmark comparison against its peers.
• Operational effectiveness figures.
• Operational efficiency figures.
• A report showing what risk is not addressed by screening – residual risk.
• A report on the screening that can be delivered to regulators.

SQA PROPOSED SOLUTION

SQA Consulting provides a Screening Assurance service based around its product Sanctions Assessment Centre. The Sanctions Assessment Centre has the capability to create test files covering different aspects of banking risk, including:

• All of the names on sanctions lists
• Manipulations of names to cover common business scenarios (such as miss-spellings)
• Geographic terms from countries of sanctions significance
• False-positive tests to establish comparative efficiency

The Sanctions Assessment Centre has been used at many banks & financial institutions & has an extensive set of benchmark figures. SQA Consulting uses its benchmarking graph, which illustrates a comparison of both effectiveness & efficiency, akin to showing cars by top-speed & economy.

The process relies on the bank providing a live-like test environment for SQA Consulting to provide a test file for. SQA customised the test file to be in the format normally used by the bank so that as live-like a test as possible could be created.

SOLUTION BENEFITS

The observation document produced after the typical 4 weeks since project start, contained observations on screening weakness, with root cause analysis, a recommendation for management, & management responses. A document such as this is exactly what a regulator is looking for, demonstrating that a thorough investigation has been conducted, & any weaknesses have plans for closure.

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