For a large bank with global operations, identifying exposure to sanctioned securities is a constant, high-volume task. Designations, ownership, and affiliations all shift regularly, so a security with no sanctions exposure at the time of trade can carry exposure afterward. That requires screening both before execution and continuously after. Keeping up requires optimized sanctioned securities screening, and that screening is only as effective as the data behind it. For years, the bank sourced that data from the same vendor: a leading financial information provider that also offered sanctioned securities data.
The basic solution offered by the financial data provider, however, carried a hidden cost. Without expertise in complex sanctions data and ownership networks, the provider failed to keep up with data integrity requirements. Records arrived with inaccurate ownership and control determinations under U.S., U.K., and EU regulatory requirements, and the provider offered no clear rationale for why a record was included. Additionally, the financial data provider lacked the ability to modify, customize, or configure the data to fit the bank’s goals of automating and streamlining its review, leaving the bank’s operational staff unsupported.
The bank's situation was not unusual. Compliance teams across the industry describe similar problems with financial data providers offering substandard sanctions securities data.
The bank also found Kharon's records to be more in-depth than the financial data provider's, as Kharon’s include the rationale for why a security was flagged, reference to relevant regulatory authorities, and sanctions category labels. The records are updated regularly, with Kharon's support team available as questions arise.
To close the bank’s existing coverage gap without overhauling its infrastructure, the data needed to be integrated natively into the bank’s core screening engine. Kharon worked closely with the bank’s technical and compliance teams to customize a sanctioned securities data format that could be loaded into the bank's screening platform. There was no ground-up build and no parallel infrastructure: the data was configured to meet the bank's requirements and delivered into the workflow the bank already relied on across everyday global investment and trading activities.
To learn more, request a demo with our team.
The basic solution offered by the financial data provider, however, carried a hidden cost. Without expertise in complex sanctions data and ownership networks, the provider failed to keep up with data integrity requirements. Records arrived with inaccurate ownership and control determinations under U.S., U.K., and EU regulatory requirements, and the provider offered no clear rationale for why a record was included. Additionally, the financial data provider lacked the ability to modify, customize, or configure the data to fit the bank’s goals of automating and streamlining its review, leaving the bank’s operational staff unsupported.
The bank's situation was not unusual. Compliance teams across the industry describe similar problems with financial data providers offering substandard sanctions securities data.
Putting the legacy financial data provider to the test
The bank had an existing relationship with Kharon. Its compliance team had relied on Kharon's risk intelligence datasets, Kharon GraphCast, and search and visualization platform, Kharon ClearView, for years. So when the bank decided to evaluate Kharon’s sanctioned securities coverage, it leveraged a sandbox environment to conduct a one-to-one comparison between the financial data provider's legacy dataset and Kharon's Sanctioned Securities dataset. According to the bank, the financial data provider's list matched only a fraction of Kharon's high-fidelity sanctions securities data, while Kharon covered the substantial majority of the provider's comparable records. Of the records unique to the provider, most were identified as noise and out-of-scope for its compliance obligations.The bank also found Kharon's records to be more in-depth than the financial data provider's, as Kharon’s include the rationale for why a security was flagged, reference to relevant regulatory authorities, and sanctions category labels. The records are updated regularly, with Kharon's support team available as questions arise.
To close the bank’s existing coverage gap without overhauling its infrastructure, the data needed to be integrated natively into the bank’s core screening engine. Kharon worked closely with the bank’s technical and compliance teams to customize a sanctioned securities data format that could be loaded into the bank's screening platform. There was no ground-up build and no parallel infrastructure: the data was configured to meet the bank's requirements and delivered into the workflow the bank already relied on across everyday global investment and trading activities.
The real cost of staying put
Financial institutions often recognize the shortcomings in legacy data providers but hesitate to make a change. In many cases, the infrastructure built around it took years to assemble, and the prospect of rebuilding from the ground up keeps compliance teams tied to what they already use. This bank proves that switching data providers can happen without the cost and disruption some compliance teams expect; and when executed correctly, long-term operational savings can be realized with such proactive decision-making. With Kharon, data is configured for the systems already in place, prepared and supported by a team with the expertise to do it right.Benchmark your sanctioned securities data
If your sanctions program depends on data that has never been benchmarked, the gap is worth measuring. See how banking compliance teams use Kharon to screen for exposure to sanctioned securities.To learn more, request a demo with our team.
