To help financial institutions (FI's) know who they can and who they cannot do business with, governments and financial authorities issue sanction lists which are updated on a regular basis.
Sanctions may be leveled against entire countries, individuals or entities. thus sanction list updates are of paramount importance to watchlist screening systems at financial institutions.
The current approach for sanction-list-updates, conducted between the list service providers and the FI, poses a number of risks.
To address these risks, EastNets has developed ChainFeed, an industry-leading blockchain-based watchlist update solution that not only eliminates these risks but also makes the process faster and much more secure.
For FI's using our en.SafeWatch Filtering application, ChainFeed updates watchlists seamlessly, in real-time.
By using ChainFeed, en.SafeWatch Filtering users can enjoy the “by design” characteristics of blockchain technology and benefit from major enhancements to the watchlist update process.
Conventional watchlist update processes leave institutions exposed.
Most financial institutions update their lists only once a day to avoid disturbance of their screening process. Watchlist service providers would add, remove or change an entity and upload the revision to their FTP/HTTPS server. This is usually done in batches and every 6-8 hours. The most common practice for a financial institution in updating watch lists is to do it manually.
The financial institution downloads the revisions and loads them to its system. This is typically done after business hours to avoid interrupting operations and has presented FI's with a number of risks and challenges including the following:
Automation: Since updates are conducted automatically, the new ChainFeed solution eliminates the need for banks to make manual changes, so there is no risk of errors or fraud.
Speed: As soon as a name is added or deleted from the watchlist, updates flow to the institution’s system.
Eliminating Downtime: Because of the way such distributed-ledger technology works, banks have no need to interrupt operations.
Integrity Check: The integrity of watchlist content can be verified against ChainFeed content to ensure completeness of the watchlists used for screening.
Security: Permissions and cryptography prevent unauthorized access.
Timestamps: All updates on the blockchain are time-stamped so users can refer back to any historical watchlist version for compliance and audit purposes.
Auditability: Any update on the blockchain can be traced to its origin, because the ledger is immutable.