Managing sanction risks in a rapidly changing geopolitical landscape 

Connections are a fundamental part of doing business. From clients to suppliers to partnerships, firms are supported and impacted by the individuals or organisations that they work with. However, while these relationships are beneficial for revenue or other business growth, they are not without their risks. These risks and their consequences can develop faster than ever thanks to the speed of information-sharing in our digital age, and geopolitical tensions with ensuing sanctions that follow.

Even the most carefully chosen professional connections bring an element of risk. The overall complexity of business relationship risk management has increased over time.  There are many more factors to take into consideration, such as: industry developments, public expectations of firms, sanctions due to national and international geopolitical situations, and other jurisdictional requirements—all dependent on where you or your suppliers do business. The risks these pose to your firm’s business connections can quickly become risks to your firm itself, and businesses face increasing scrutiny from all sides over how they conduct their business obligations.

Risks, such as the creation of sanctions regimes, carry legal obligations to act swiftly and accurately. As information spreads so rapidly through news and social media, compliance teams may often have very little notice about changes to risk profiles. Senior leadership figures and compliance and risk teams need to be able to monitor and manage these risks in real time and ensure that they and other members of staff are equipped with the right knowledge and tools to respond appropriately.

Given the volume and complexity of these risks, compliance staff are relying on digital tools to continuously monitor and manage business relationships. Software elements like machine learning can help reduce false positives so teams can manage the sheer amount of data related to whether a client or supplier is receiving adverse media coverage, has been added to a sanctions list, or is conducting transactions above a certain amount. As compliance takes a team effort, digital compliance management services can help firms record that employees have acknowledged awareness of company policies and are following procedures designed to mitigate risk. Additionally, using software to track risk hotspots helps firms ensure supervision over critical controls and keeping risk aligned with operational goals.

Technology alone cannot overcome the challenge of managing business relationship risks. While software can be used to monitor transactions, media coverage, or sanctions lists, a ‘human touch’ of compliance expertise is needed for tasks like getting to the root of complex business structures or deciding on appropriate actions to take based on your firm’s risk appetite.  Using a mixture of digital tools and hands-on or ‘manual’ compliance activity allows firms to balance competing priorities and allocate resources more effectively to keep up with an ever-changing compliance landscape.

Find out more about how the ComplyPortal platform can help firms adapt to new regulatory expectations at:

About ComplyPortal:

First developed in 2011 by compliance professionals for compliance officers, ComplyPortal offers workflow, automation, and several modules to help firms with control and regulatory compliance monitoring.

ComplyPortal simplifies financial services regulatory compliance management on an easy-to-use cloud-based comprehensive compliance platform. It enables compliance officers, risk officers and senior management to keep track of their firm’s regulatory responsibilities and workflows. Our platform includes the following modules, among others:

  • Monitoring: a year-round schedule pre-populated with monitoring questionnaires to ease compliance processes.
  • Registers: lists controlled by the Compliance officer, but easy for staff to view.
  • Risk: map and control risk areas to effectively identify and manage risk for your firm.
  • eKYC solution: perform comprehensive searches, including client identity verification, document authenticity, and more for a comprehensive KYC and AML approach