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January, 2024

cloud native sanctions screening solutions

Embracing cloud-native sanctions screening solutions 

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In the dynamic global financial landscape, banks grapple with unprecedented challenges in navigating sanctions regulations. The surge in sanctioned entities and the increasing complexity of sanctions rules demands a paradigm shift in screening solutions.  

Traditional methods often fall short, resulting in soaring rates of false positives and missed detections. Against this backdrop, the financial industry is increasingly recognising the transformative potential of cloud-native technology in shaping the future of banking compliance. 

Six Key Benefits of Cloud-Native Sanctions Screening Solutions: 

Cloud-native sanctions screening solutions that are well architected and managed successfully outshine their on-premises counterparts, offering financial institutions the flexibility to adapt to ever-increasing transaction volumes. This adaptability becomes crucial given the continuous growth in cross-border transactions, the growing number of sanctioned entities and the continuous pressure on costs. The ability to seamlessly scale up and down ensures uninterrupted compliance within evolving regulatory landscapes. 

The cost differences between traditional on-premise and cloud-native solutions are garnering attention across financial institutions. Cloud-native solutions, with their scalability and predictability, enable banks to drastically reduce operational costs. On-premise solutions require high fixed capacity to cope with spikes in transactions. Whereas cloud-native solutions can scale the capacity up or down based on demand.  

Research indicates that deploying advanced technologies can cut false positives, potentially translating into substantial operational cost reductions. According to Celent research, deploying the latest technologies can reduce false positives by as much as 60% to 75%. This translates into a potential US$22.8 million reduction in operational costs. 

Unlike traditional on-premise solutions with dual data centres, cloud-native platforms offer inherent advantages in terms of resilience. Triple data centres and cross regional failover mechanisms, allow for increased resilience and greater uptime.  

This enhanced resilience aligns with evolving regulations, like the Digital Operational Resilience Act (DORA), that seek stricter data availability and disaster recovery assurances. This translates to greater uptime, minimised data loss risk, and improved compliance confidence, making cloud platforms a compelling choice for organisations prioritising robust and compliant operations. 

Security and resilience take centre stage with cloud-native solutions, with the clear potential to surpass traditional on-premises alternatives.

On-premise solutions often offer a façade of security with physical walls and multiple firewalls. However, on-premise solutions can become outdated and vulnerable over time. In comparison, cloud security is constantly updated, defending against ever evolving threats.  

The advances in cloud-native technology and continual development of these provides enhanced security measures, real-time data replication, and improved resilience against outages and maintenance disruptions.  

Well engineered cloud-native sanctions screening solutions offer highly targeted configurations. Providing the ability to tailor based on fields, lists and matching systems, allowing you to screen different transactions in different ways on the same system. This fine-grained configuration leads to enhanced accuracy and efficiency

Cloud-native solutions contribute to sustainability by reducing the carbon footprint associated with sanctions screening. Financial institutions leveraging cloud platforms can benefit from energy-efficient technology and infrastructure, aligning with broader industry goals of environmental responsibility. 

Industry-Wide Adoption 

As the financial industry embraces cloud-first strategies, the adoption of cloud-native sanctions screening solutions becomes a strategic imperative. This shift is not only about compliance processes but also about reducing costs and mitigating risks. Cloud-native technology within sanctions screening continues to evolve, with various players, including GSS, contributing to the broader industry narrative of innovation and efficiency. 

The industry is at a pivotal point, recognising the transformative potential of cloud-native technology in sanctions screening. While GSS remains at the forefront of this technological evolution, the broader industry narrative is one of adaptation, efficiency, and a commitment to meeting the evolving challenges of banking compliance. As banks navigate this transformative era, the subtle integration of cloud-native solutions emerges as a catalyst for change, fostering a landscape that is agile, resilient, and aligned with the latest regulatory standards. 

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