Sanctions compliance has traditionally relied on name-based screening and public watchlists to flag potential threats, but as financial crime tactics evolve, this approach is no longer enough.
The rise in complex evasion techniques means financial institutions (FIs) are increasingly seeing the limitations of legacy systems. What once served as a basic control now struggles to keep up with modern threats, prompting a reevaluation of compliance strategies.
SymphonyAI, which offers AI SaaS applications, recently explored the future of sanctions compliance.
Conventional screening methods often generate an overwhelming number of false positives while failing to catch more sophisticated violations. A 2020 Bank Policy Institute study revealed that such screenings rarely produce true matches, yet consume extensive resources. This inefficiency leaves firms exposed to risks while burdening compliance teams with unnecessary workload. Moreover, name-based screening lacks the depth to uncover complex behaviours like sanctions evasion.
To address these shortcomings, many FIs are embracing a new wave of technology-driven compliance tools SymphonyAI explained. AI, machine learning, and big data analytics are now central to modern sanctions screening. These tools provide real-time risk detection, going beyond static lists to uncover suspicious patterns, connections, and behaviours.
AI and machine learning systems are able to process vast volumes of data and detect subtle anomalies or behavioural changes that might indicate sanctions evasion. These tools can also assist research functions within sanctions advisory teams, ensuring consistent and data-driven guidance. For example, AI can detect suspicious transaction patterns and network behaviours that point to hidden risks—something that traditional tools often miss.
Generative AI is also making inroads into sanctions compliance by offering greater context, SymphonyAI added. It can analyse unstructured data like news articles and social media posts to surface additional insights into a customer or entity’s background. This broader view improves the accuracy of screening and helps reduce false positives while ensuring that meaningful matches are not overlooked.
Sanctions compliance does not exist in a vacuum. Increasingly, there is a need to integrate sanctions screening with anti-money laundering (AML) and know-your-customer (KYC) processes. These functions are often siloed within financial institutions, which can lead to inefficiencies and missed opportunities to detect cross-cutting risks. In reality, many sanctions evasion typologies closely resemble classic money laundering patterns, and integrating AML/KYC data enhances the overall risk picture.
By breaking down organisational silos and adopting a more unified compliance model, FIs can improve their ability to detect and prevent financial crime. Using KYC data and risk ratings in sanctions processes is especially valuable in identifying high-risk clients and transactions that may otherwise be overlooked.
For more information, read the full story here.
Keep up with all the latest FinTech news here
Copyright © 2025 FinTech Global
Copyright © 2018 RegTech Analyst
