What is watchlist management?
Watchlist management refers to the organization and updating of all watchlist data that is required for financial institutions to abide by global government and central bank regulations. This data is primarily used during name and transaction screening processes. Watch List Management (WLM) can also refer to the combination of name and transaction screening as part of sanctions, PEP, and adverse media screening.
What is a watchlist?
A watchlist is a catch-all term for a variety of different lists a financial institution may use in the screening process. These include official sanctions lists issued by governments, law enforcement agencies, regulators, and central banks that feature names of sanctioned individuals and organizations. Alongside these lists might be private lists circulated to specific organizations, commercial lists that include PEP and adverse media coverage, and internal lists that have been created by a financial institution according to their risk profile.
Are watchlists updated regularly?
Watchlists should be updated regularly as part of effective watchlist management. This is because agencies often update their lists and a financial institution needs to be proactive if they wish to stay ahead of regulations.
A bank can abide by these regulations through name screening and customer due diligence processes.
What are the challenges of watchlist management?
There are a number of challenges in watchlist management. Because there are so many lists, it can be a complex process to keep up to date and import all of the data available. Alongside this, a financial institution may be unaware that some of the data they are pulling into their full watchlist is out of date.
Other challenges include poor quality or incomplete data, duplication between lists, and the difficulty of maintaining watchlists.
What are the benefits of watchlist management?
Effective watchlist management enables improved name screening, sanctions screening, and transaction screening.
It ensures compliance with laws and regulations, prevents financial crime, and reduces risk for a financial institution. It also reduces the risk of any fines or legal liabilities.
