Challenges of sanction screening in instant payments

There are two key challenges with sanctions screening in the context of instant cross-border payments:
  1. 1.
    There is no time for manual intervention. The Sender needs a clear response as to whether the payment will proceed or not, so the Source Bank, Destination Bank and FX Provider all need to screen the payment and decide whether an alert is a true or false match within seconds. Sending payments for manual intervention could create unpredictable delays to payments.
  2. 2.
    It is not financially worthwhile to manually review alerts for instant payments. For traditional cross-border payments, the bank may be charging a considerable fee to the Sender (or Recipient) to send the payment. This fee covers (among other things) the cost of manually reviewing payments that trigger alerts. However, Nexus payments are likely to be low value, high volume and earn lower fees than traditional correspondent payments. This means the cost of staff time to review the payment will likely exceed the additional revenue generated by the payment.