Navigating Sanctions: A Guide to Individual Sanctions Screening for Fintech

The rapid growth and global interconnectedness of the fintech industry have brought unprecedented innovation but also heightened regulatory scrutiny. At the forefront of this scrutiny is Anti-Money Laundering (AML) and Counter-Financing of Terrorism (CFT) compliance, particularly individual sanctions screening. Financial institutions, including fintechs, are legally obligated to screen their customers against global sanctions lists, such as the U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) Specially Designated Nationals (SDN) list. Failing to do so can result in severe penalties, including multi-million dollar fines and reputational damage. For instance, OFAC frequently levies substantial fines against organizations found in violation of sanctions programs, underscoring the critical need for robust, efficient, and scalable compliance measures. The sheer volume of new customer onboarding in fintech, coupled with constantly evolving sanctions lists, makes manual screening not just inefficient but increasingly untenable, leading to significant operational bottlenecks and a poor user experience.

The Pitfalls of Manual Screening

Relying on manual processes for individual sanctions screening in a high-volume fintech environment is fraught with challenges:

• Time-Consuming and Resource-Intensive: Each check requires significant human effort, diverting valuable resources from core business activities.
• Prone to Human Error: Manual data entry, name matching, and verification can easily lead to mistakes, increasing the risk of false positives or, worse, missing a sanctioned individual.
• Difficulty Keeping Up with Changes: Sanctions lists are dynamic, with daily updates. Manual processes struggle to incorporate these changes in real-time, leaving organizations vulnerable.
• Negative Impact on User Experience: Slow onboarding due to manual checks can frustrate prospective customers, leading to abandonment and lost revenue.
• Scalability Issues: As a fintech grows, manual screening processes simply cannot scale efficiently, becoming a bottleneck to expansion.

Automating Compliance with Onboarding Buddy's API

To overcome these challenges, fintechs are increasingly turning to automated solutions. Onboarding Buddy's Sanctions Check API provides a powerful, real-time tool for screening individuals, offering a robust defense against financial crime while enhancing operational efficiency and customer experience.

Key benefits of integrating Onboarding Buddy's API:

• Real-time Screening: Instantly check individuals against the latest sanctions lists, ensuring immediate compliance.
• Accuracy and Reduced Errors: Automated processes minimize human error, providing more reliable results and fewer false positives.
• Scalability: Effortlessly handle high volumes of checks, scaling with your business growth without increasing manual overheads.
• Improved Customer Experience: Expedite the onboarding process, allowing legitimate customers to access your services faster.
• Cost-Effectiveness: Reduce operational costs associated with manual labor and potential regulatory fines.
• Seamless Integration: Easily embed sanctions screening directly into your existing platforms and workflows.

How Onboarding Buddy's API Streamlines Individual Sanctions Checks

Onboarding Buddy's API simplifies the complex task of individual sanctions screening. By making a simple API call, you can submit an individual's details and receive an immediate match result against global sanctions lists. This empowers your systems to make real-time decisions, significantly improving compliance efficiency.

Here's how you can perform an individual sanctions check using the API:

C# Example:

using System.Net.Http;
using System.Text;
using System.Text.Json;
using System.Threading.Tasks;

public class IndividualSanctionsCheckRequestM
{
    public string? FirstName { get; set; }
    public string? LastName { get; set; }
    public string? BirthYear { get; set; }
}

public class IndividualSanctionsCheckResponseM
{
    public bool Matched { get; set; }
}

public async Task<IndividualSanctionsCheckResponseM> CheckIndividualSanctionsAsync()
{
    using var client = new HttpClient();
    client.DefaultRequestHeaders.Add("ob-app-key", "<your-app-key>");
    client.DefaultRequestHeaders.Add("ob-api-key", "<your-api-key>");
    client.DefaultRequestHeaders.Add("ob-api-secret", "<your-api-secret>");

    var request = new IndividualSanctionsCheckRequestM
    {
        FirstName = "John",
        LastName = "Doe",
        BirthYear = "1980"
    };

    var content = new StringContent(JsonSerializer.Serialize(request), Encoding.UTF8, "application/json");
    var response = await client.PostAsync("https://api.onboardingbuddy.co/sanction-service/check/individual", content);
    response.EnsureSuccessStatusCode();
    var responseContent = await response.Content.ReadAsStringAsync();
    return JsonSerializer.Deserialize<IndividualSanctionsCheckResponseM>(responseContent)!;
}

Python Example:

import requests
import uuid

headers = {
    "ob-app-key": "<your-app-key>",
    "ob-api-key": "<your-api-key>",
    "ob-api-secret": "<your-api-secret>",
    "Content-Type": "application/json"
}

payload = {
    "firstName": "John",
    "lastName": "Doe",
    "birthYear": "1980"
}

response = requests.post(
    "https://api.onboardingbuddy.co/sanction-service/check/individual",
    headers=headers,
    json=payload
)
response.raise_for_status()
print(response.json())

TypeScript Example:

import axios from 'axios';

interface IndividualSanctionsCheckRequestM {
  firstName?: string;
  lastName?: string;
  birthYear?: string;
}

interface IndividualSanctionsCheckResponseM {
    matched?: boolean;
    results?: Array<IndividualSanctionRecordM> | null;
}

async function checkIndividualSanctions(): Promise<IndividualSanctionsCheckResponseM> {
  const client = axios.create({
    baseURL: 'https://api.onboardingbuddy.co',
    headers: {
      'ob-app-key': '<your-app-key>',
      'ob-api-key': '<your-api-key>',
      'ob-api-secret': '<your-api-secret>',
      'Content-Type': 'application/json'
    }
  });

  const request: IndividualSanctionsCheckRequestM = {
    firstName: 'John',
    lastName: 'Doe',
    birthYear: '1980'
  };

  const response = await client.post('/sanction-service/check/individual', request);
  return response.data;
}

Future Trends in Sanctions Screening

The landscape of compliance is continuously evolving. Future trends in sanctions screening include:

• Advanced AI and Machine Learning: AI and ML will further refine screening accuracy, reduce false positives, and identify complex sanction evasion patterns, moving beyond simple keyword matching.
• Continuous/Perpetual Screening: Moving from one-time checks at onboarding to ongoing, real-time monitoring of customer portfolios to detect emerging risks.
• Blockchain Analytics: As digital assets become more mainstream, sophisticated tools for screening cryptocurrency wallets and transactions for sanctions compliance will be crucial.
• Enhanced Data Sharing and Collaboration: Greater emphasis on secure and compliant data sharing between financial institutions and regulators to create a more comprehensive view of risk.

Adopting an API-first approach to compliance, as offered by Onboarding Buddy, positions fintechs at the forefront of these advancements, ensuring they remain compliant and competitive.

Strengthen your compliance framework. Learn more about Onboarding Buddy's Sanctions Check API: https://www.onboardingbuddy.co