Is Over-screening Affecting The Main Purpose of Customer Screening?

Like the screening challenges weren’t enough for people. (sighs)

Of course, the prevailing challenges add up to great trouble for the end users. If one is to consider the AML side or Anti-Money Laundering screening, one could discover more holes than patches in the format. Though tracking and trapping suspicious behavior are considered an ideal action in the sequence, some things may go overboard and thwart the process.

Whenever a suspicious activity takes place in the accounts, let’s suppose it involves a drug cartel lord and the entire focus shifts on to this. However, a major transactional activity goes out of the picture and the patterns aren’t tracked enough for the entire screening procedure. As a result, no AML screening could work effectively. If the puzzle is solved later, it’s too late for recovery.

Could it have been dealt better? Yes, most of the experts have design screening controls with high-efficiency levels to track the transactions by name matching capabilities. Fortunately, the controls do not screen it in real-time for avoiding overload-kind situations. It can be only utilized when extremely necessary for stopping the transaction. Generally, the screening against curated denied parties list would draw specific results. However, it can cause a headache with over-screening as well.

For example, the PEP or Politically Exposed Person list is too broad for anyone to figure out. Here, one cannot identify the suspicious person clearly due to the added number of lists. This could be their associates, partners, relatives, and so on. Further, this elongates the procedure of screening and causes over-emphasis that isn’t necessary from the AML perspective. Perhaps, customer screening needs to be more precise instead of being audacious-of-all-kind. Thereby, it would not only help do the accurate screening but also prevent causing nuisance in the process.

Precisely, what we can configure from this is the kind of screening controls designed will need optimization for preventing over-screening. This has to come from experts and in fact, some of the screening software companies as well as trade compliance consultants have already produced reliable solutions for it. Here, there’s always a room for improvement. If it weren’t for the troubling signs, one would merely notice what’s wrong with the procedures.

Nowadays, trade compliance consultants work hand-in-hand with the companies or organizations for devising the suitable screening methods. Perhaps, the KYC screening has ticked off for the same. KYC or Know Your Customer is an effective tool for verifying a customer’s details. Several countries have been using this to counter duplication, misuse, and similar activities.

If you are a company or organization, you should find trade compliance consultants for quick assistance regarding export regulations and screening procedures. Given the strict atmosphere in export controls, you cannot violate rules without notice. The civil and criminal penalties with respect to violations could be fierce. Moreover, a brand loses its reputation and credibility due to such incidents. Therefore, you should consult experts with premium knowledge and skills in guiding in the right direction of trade compliance.

Author Info:-

Fred Danny writes about over-screening of international and domestic trade partners and possible gaps in the process. He shares how customer screening and KYC screening have proven revolutionary in the grounds of the export control regime. Moreover, he supports the idea of AML screening as an effective step to stop corruption and other illegal activities.

Linqs software helps you with an accurate KYC screening of customers or trading partners before entering a deal with them.