FinScan has achieved several key technological milestones meeting the evolving needs of the financial services industry. The launch of FinScan Securities, one of the compliance industry’s first financial instrument screening solutions,  leverages FinScan’s proprietary, AI-powered matching engine to help firms tackle the growing problem of investors holding financial interests in sanctioned companies.

In addition, FinScan’s innovations are responding to the transformative shift from traditional Know Your Customer (KYC) processes to perpetual KYC (pKYC) focusing on streamlining customer due diligence and onboarding by delivering powerful customer risk scoring, real-time adverse media screening, beneficial owner identification, identity validation capabilities, and continuous customer monitoring after onboarding is complete.

Bob Colonna, CEO of Innovative Systems, Inc., said: “Partnering with our customers to make them successful is at the forefront of FinScan’s priorities. In 2023, we achieved a 92% client retention rate. We’ve also expanded our base of new customers in all major geographies over the last 18 months, including tier one insurance firms and fintechs. Our commitment to the delivery of reliable, efficient compliance solutions is further proven by the staggering 300 billion annual name screenings our SaaS customers conducted in over 60 countries in just milliseconds.”

A recent FinScan LinkedIn poll showed that 62% of 162 compliance professionals said data quality and accuracy was their compliance team’s biggest screening challenge. A separate poll revealed that 54% said incomplete customer data was the biggest cause of false positives. Another poll of 216 compliance professionals indicated the top challenge they face during KYC onboarding is customer due diligence (43%), followed by customer data quality (35%)—a core strength of FinScan.

Brian Markham, Senior Vice President of Engineering, added: “FinScan’s strategy for the next 12 months continues to focus on harnessing the power of data quality and integrity to drive efficiency, accuracy, and risk reduction for financial institutions and other organizations around the world. Innovative Systems will continue to invest in further development of FinScan to address the evolving needs of its customers and future-proof their AML and KYC processes to adapt to inevitable change.”

In recognition of its innovative solutions and industry leadership, FinScan has received numerous industry accolades. Most recently, FinScan was recognized as:

• “Best Sanction/Watchlist Screening Innovation” in Datos Insights’ 2024 AML Impact Awards
• Solution Leader in the Quadrant Knowledge Solutions’ SPARK Matrix 2024 report on KYC technology
• Category Leader for “Adverse Media Monitoring Solutions” and “Name and Transaction Screening Solutions” in Chartis’ RiskTech Watchlist Monitoring 2024
• “Functionality Standout” in Celent’s Financial Crime Compliance Technology: Watchlist Screening Edition—2024 XCelent Awards
• Top 25 Governance, Risk, and Compliance companies of 2024 by The Financial Technology Report
• 2024 FinCrimeTech50 company and 2024 RegTech100 company by Fintech Global

Looking forward, Steve Maul, Chief Revenue Officer, said: “We remain dedicated to supporting organizations in overcoming their financial crime detection and AML compliance challenges. Our continuous investment in cutting-edge technology and expert guidance ensures our customers can navigate the complexities of the regulatory environment effectively and sustainably.”

About FinScan®

Trusted by hundreds of organizations worldwide, Innovative Systems, Inc.’s FinScan® offers advanced Anti-Money Laundering (AML) compliance technology and consulting solutions. Built on decades of experience in data management and proprietary matching technologies, FinScan provides a data-first, risk-based approach to ensure unparalleled accuracy and efficiency in identifying and reducing risk, accelerating AML compliance workflows, and optimizing team productivity. FinScan’s comprehensive, integrated platform includes Know Your Customer (KYC), unparalleled sanctions screening, risk scoring, data quality, and advisory services for implementing a holistic compliance program. FinScan offers flexible deployment including SaaS, on-premise, and hybrid options. FinScan’s SaaS clients are screening more than 300 billion names a year. Learn more at www.finscan.com.

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Data quality has been a critical challenge in AML and sanctions compliance for decades. But today, the stakes are higher as compliance professionals are responsible for the consequences of bad data, such as too many false positives, unnecessary due diligence, and the ultimate risk of missing a true hit, which can lead to fines and reputational damage. In addition, guidance from industry bodies like Wolfsberg Guidance on Data Integrity, Fed/OCC SR 11-7 and even state regulators such as NYS DFS Part 504 call for “validation of the integrity, accuracy and quality of data to ensure that accurate and complete data flows through the Transaction Monitoring and Filtering Program.”

Becki LaPorte, CFCS, FIS, and Strategic Advisor on Fraud & AML at Datos Insights, said: “Poor data quality often leads to ineffective risk detection, high false positive rates, and operational inefficiencies. FinScan Enhance effectively addresses these challenges by providing a comprehensive, compliance-specific data quality solution integrated directly into the screening process, which helps uncover hidden risks that traditional screening processes might miss. The implementation of FinScan Enhance has also yielded impressive results.”

In a recent FinScan poll of 162 compliance professionals around the world, 62% said data quality and accuracy was their compliance team’s biggest screening challenge. Another recent FinScan poll revealed that incomplete customer data was the biggest cause of false positives among 54% of the 194 compliance professionals who responded. Another recent FinScan poll of more than 300 North American compliance professionals revealed that 54% spent a significant amount of their time in 2023 on data quality – more than any other area of AML compliance.

FinScan Enhance is the only known solution in the AML/KYC space that directly addresses the continuous enhanced quality of data specifically for AML/KYC compliance. Based on decades of data management experience, FinScan Enhance helps address the issue of questionable customer data quality that can expose hidden risks within organizations. It boosts risk detection and saves time by enabling compliance teams to discover hidden records and optimize reviews and potentially apply the same remediation decisions to resolve duplicate alerts.

Deborah Overdeput, Chief Marketing Officer at FinScan, said: “Poor data quality is a principal contributor to eroding the effective performance of organizations’ AML and sanctions programs, negatively impacting risk mitigation and productivity. FinScan Enhance’s ability to persistently enhance the quality of data makes it a game-changer for compliance teams. It can save companies valuable time and resources by continuously monitoring for sanctions breaches, despite errors in customer data feeds, to deliver better results faster.”

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The threat of non-compliance in financial markets is persistent, with regulators continuing to modify the lists of sanctioned companies, which increases the risk of sanctions for investment advisors, private funds, custodians, and other capital markets firms. In addition, the financial sector is highly attractive to criminals due to its international nature, convenient online trading access, and the ability to execute trades at speed and move illicit funds rapidly and easily across borders.

The sheer scale of the markets and a wide selection of complex products that can be exploited for sophisticated money laundering and sanctions evasion schemes are also a draw, helping bad actors evade detection. FinScan Securities helps uncover hidden risks in financial instrument compliance. With the data organized, companies can clear AML and sanctions hits quickly by reviewing alerts for all business operations.

“Regulators worldwide are acutely aware of the escalating risk to investors who unknowingly trade securities of sanctioned companies or countries and are intensifying their efforts to combat this,” comments Becki LaPorte, Strategic Advisor in the Fraud & AML Practice at Datos Insights. “Capital markets players must have robust systems and processes in place to prevent investments in a sanctioned jurisdiction or entity. FinScan Securities is helping to fill the void of limited options that currently exist to address watchlist screening of securities and trading.”

“Identifying sanctioned entities in the complex web of securities, structured products, and options has traditionally been highly challenging and reliant on manual processes. Even where organizations have managed to do this, the technology has not been available to organize and manage the results,” said Steve Marshall, Director of Advisory Services at FinScan, “FinScan Securities provides a complete, streamlined workflow from data analysis and clean-up to audit trails and reporting. As a result, time is saved, and risk is reduced by eliminating the need to rely on spreadsheets or manual reviews, and alleviating the burden on IT departments to develop and maintain a homegrown solution.”

FinScan Securities covers a range of jurisdictions and sanctioning authorities, including the UN and OFAC and regulators in Australia, Hong Kong, Japan, New Zealand, Singapore, the EU, the Netherlands, Switzerland, the UK and California. Further additions are in the pipeline.

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