Automated Sanctions Screening on Shared Ledger

Eliminate the massive overhead of duplicate screening across every counterparty in a transaction. With a shared ledger, each entity is screened once, and the verified status is immutably recorded for all participants to trust and rely upon.

• Example: A correspondent bank can avoid re-screening a corporate client already validated by the originating bank, saving thousands in per-check fees and analyst time.
• ROI Driver: Reduces per-transaction compliance costs from dollars to cents, directly impacting the bottom line.

Replace batch processing delays with continuous, real-time screening. Transactions can be pre-screened against the latest sanctions lists the moment they are proposed on the shared ledger, preventing costly delays and failed settlements.

• Pain Point Solved: No more holding funds for 24-48 hours while manual checks clear. This accelerates transaction finality from days to minutes.
• Business Value: Unlocks liquidity, improves customer experience, and enables new revenue streams from faster payment corridors.

Provide regulators with a tamper-proof, end-to-end record of every screening decision. The shared ledger creates an immutable log of who was screened, when, against which list, and by whom, dramatically simplifying audits and examinations.

• Compliance Advantage: Demonstrates proactive RegTech adoption and reduces regulatory risk. The audit trail is self-service for regulators, cutting down inquiry response time from weeks to hours.
• Real Example: A consortium of banks using this model can present a unified, verifiable compliance record to global supervisors like OFAC or the FCA.

Sharply reduce false negatives and the risk of accidental sanctions violations. A shared, constantly updated screening source reduces errors from outdated lists or misinterpretation of aliases that plague siloed systems.

• Quantifiable Benefit: Avoids penalties that can reach billions of dollars and irreparable brand harm. The collaborative nature of the network improves list accuracy and entity identification for all members.
• Strategic Move: Transforms compliance from a defensive cost to a proactive risk management and brand integrity pillar.

Unlock business with counterparties in emerging or high-risk markets by establishing a framework of verifiable, shared compliance. This creates a 'trusted corridor' where all participants are pre-vetted, de-risking transactions that were previously too complex or costly.

• Competitive Advantage: Financial institutions can offer faster, more reliable cross-border services to niche markets, capturing new customer segments.
• Industry Example: Trade finance consortia use shared KYC/AML ledgers to facilitate billions in new trade for SMEs by reducing onboarding friction.

Build an adaptable compliance infrastructure. A shared ledger protocol allows for the seamless integration of new sanctions lists, regulatory jurisdictions, and screening logic updates across the entire network simultaneously.

• Operational Resilience: Eliminates the costly, error-prone process of manually updating dozens of internal systems. Changes are propagated instantly and uniformly.
• Long-Term ROI: Reduces the IT and operational burden of constant regulatory change management, ensuring ongoing compliance at a fraction of the current cost.

Banks and payment processors today screen the same transaction multiple times as it moves through correspondent networks, paying for the same check at each hop. A shared ledger of verified identities allows for a 'screen once, pass everywhere' model. This can reduce per-transaction compliance costs by up to 80% by eliminating redundant KYC/AML checks. Example: A cross-border payment passing through 3 correspondent banks triggers 3 separate, expensive screening events. On a shared ledger, the sanctioned party check is performed once and immutably recorded.

Batch processing and stale data cause delays and high false-positive rates, freezing legitimate transactions for manual review. A blockchain-based system provides real-time updates to sanctions lists and a single source of truth for entity verification. This slashes investigation time and frees compliance teams to focus on true risks. For instance, a major European bank reported that implementing a shared KYC utility reduced false positives by over 50%, cutting manual review workload significantly.

Demonstrating compliance to regulators requires piecing together logs from disparate systems, a slow and fragile process. A permissioned blockchain creates an immutable, timestamped record of every screening event, decision, and data source. This provides regulators with direct, read-only access to a verifiable audit trail, streamlining examinations and reducing regulatory risk. A pilot by a consortium of Asian banks showed audit preparation time could be reduced from weeks to hours.

The investment case is built on hard cost savings and risk reduction:

• Direct Cost Savings: Slash per-transaction screening fees and manual labor costs.
• Capital Efficiency: Reduce operational risk capital reserves by improving control effectiveness.
• Faster Settlement: Unlock working capital by minimizing transaction holds from manual reviews.
• Future-Proofing: Avoid escalating costs and complexity of maintaining legacy, siloed screening systems. The payback period for a consortium-based solution can be under 18 months based on shared infrastructure costs and immediate process efficiencies.

De-risking adoption begins with a focused pilot. Recommended approach:

1. Form a Working Group: Partner with 2-3 trusted correspondent banks on a specific corridor.
2. Define the MVP: Automate sanctions screening for low-value, high-volume payments on the shared ledger.
3. Integrate with Legacy: Use lightweight APIs to connect the ledger to existing core banking and screening systems.
4. Measure & Scale: Quantify the reduction in cost, time, and false positives, then expand to more partners and transaction types. This phased approach controls cost and demonstrates tangible value at each step.