22/01/2021

What are Financial Sanction Checks?

By Mariana Marques

It is a term that most of us have probably heard of at some point in our life when taking out a loan, mortgage, or any form of credit agreement for that matter, but do we know what it means?  ‘What are sanction checks and why are they used? Are they important?’  There are naturally a lot of questions around financial sanctions checks because they are somewhat of an unknown to anyone who isn’t actively involved in the process of financial sanction checks. 

Luckily enough, the team of experts at Imburse Payments are here to help answer the questions such as what are sanctions checks? How do they work? Who is subject to them?

What is a Sanction Check?

Financial sanctions checks are a very extensive and particular set of searches that include referencing a number of government databases in order to identify whether or not an individual is or has been excluded or prohibited from certain industries or activities.

Financial sanction checks can be performed by a fairly wide range of employers and other organisations/authorities. Sanction checks are most common in industries that are heavily regulated such as the financial sector, healthcare etc.

regulations

Why are Financial Sanction Checks so Important?

Sanction checks are incredibly important in the finance sector, for a number of reasons. Perhaps the most salient reason being that it helps prevent financial crimes such as financial corruption, bribery, money laundering – just to name a few. These crimes are more prominent than perhaps we’d like to think and therefore, sanction checks are a vital steppingstone to preventing them from happening. Sanction checks are also the most important process for ensuring companies are AML compliant.

 

How Do Financial Companies or Institutions Comply with Sanction Checks?

Vendor management speeds up the onboarding process.

Financial institutions and organisations are obliged to ensure that any customer or prospective customer is compliant with AML requirements. Sanction checks allow the company to protect not only their reputation but also help avoid violating sanction regulations. Given that is no longer feasible for a company to manually carry out sanction checks (there are over a thousand lists that need checking now), the company can comply with their sanction check obligations through the use of compliance software. The software itself carries out the sanction checks and will immediately flag any suspicious activities or customers who do meet requirements.

About Imburse

Imburse is a cloud-based middleware connecting large enterprises to the payments ecosystem, regardless of their existing IT infrastructure. Through a single connection to Imburse, enterprises can collect or pay out using a variety of payment technologies and providers around the globe.

In a world where consumers payment preferences and technologies are ever-evolving, Imburse works with insurers to future-proof their payment requirements. Regardless of the business area, market, or requirements, Imburse will connect you to your choice of technology and provider.

Reach out to our team below should you want to discuss how Imburse can help you. Our team is happy to show you what our platform can do for your business and offer you a free demo.

About Mariana Marques

Mariana is a content writer at Imburse, specialising in Finance and Technology topics.

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