Watchlists Screening: Safeguarding Your Interests with Proactive Monitoring

Learn from recent fraud cases, the counter strategies for effective watchlist screening.


Fraud detection is a critical concern for financial institutions, especially since the world has become globalized and transactions are becoming more digitally equipped. The momentum of weakened AML controls was depicted in the 9/11 terror attacks which led to reforms in watchlist screening protocols across the USA. 

Emerging from the 1980s till 2022 and still in continuation, 2022 has seen some of the most unexpected and shocking financial fraud. For an estimate, 40% of the businesses have acknowledged regulatory violations, ranging from crypto fraud to money laundering. 

This blog will shed light on some of the most shocking fraud cases that rose to the surface, highlighting gaps in their security measure. This blog will also be your methodical guide for developing competitive ongoing watchlist screening to safeguard reputation with proactive monitoring

Inefficient Watchlist Screening: A Shared Problem? 

Almost 41% of the ongoing financial crimes are fraud-related, bringing attention to the inefficiency of the watchlist screening system looming at large. This revelation provokes a critical examination to know whether the inefficiency is a shared problem or a lack of insight into practical implementation.

Luckin Coffee Charged by United States Securities Exchange Commissions 

The most shocking case of 2022, was of Luckin Coffee, which deceptively lured investors’ money by presenting made-up sales and revenue statements. This coffee chain, which at some point of progression surpassed Starbucks – the world’s most famous coffee chain, suffered greatly at the expense of not abiding by AML regulations. A quick  breakdown of the case is as follows: 

  • May 2018 – Luckin’s raised $200 million to start their business, which was valued at $1 billion  
  • January 2019 – Lucking emerged as a rising coffee chain surpassing Starbucks. 
  • April 2020 – Murree Waters put forth 89-page report, which anonymously highlighted suspicioun regarding  financial reports  of coffee chain.
  • December 2020- the coffee chain itself acknowledged their reports to be “made-up” and agreed to fines worth $180 million, as mandated by the SEC of the United States of America. 

FTX Involvement in Financial Fraud 

In 2020, authorities uncovered FTX’s heavy involvement in financial fraud, leading to the arrest of CEO Bankman Fried on multiple charges, including money laundering. A glimpse into this case is as follows: 

  • November 2 – Coin Desk published an article that raised suspicion about FTX accounting 
  • November 6 – Binance got rid of all the FTX tokens abiding by their prompt action to protect their reputation. 
  • November 8- Later on, Binance stepped ahead to even own FTX, however in response to their due diligence process. They backed away from the decision. 
  • November 12 – FTX, after sensing increased scrutiny,  declared cyber attacks on their platform. And used this as an excuse to move their assets to cold storage. 
  • Dec 12-22 – Finally, authorities arrested Bankman Fried on multiple charges of fraud. And he was granted bail on the largest bond in history, amounting to $250 million.

This case study of cryptocurrency clearly depicts the advancement of crimes. And the negligence of a business in maintaining strong sanctions & watchlist programs. Binance, intentionally decided to safeguard its reputation while other companies intentionally chose to lead the wrong way, thus suffering consequences. 

Efficient Watchlist Monitoring Service – Key Insights to Follow 

Ahead, we discuss strategies to follow in order to avoid suffering legal repercussions.

  1. New Forms Of Data

As with modern advancement, forms of data for prompt detection of crimes are a challenge to meet. The shocking revelation highlights social media as the platform facilitating the highest number of fraud cases.  

As per analysis, 78% of fraud cases originate online, which lays significant emphasis on considering diverse forms of data for a more comprehensive watchlist screening service.

  1. Real-time Monitoring 

Unlike common assumptions, watchlists are not the wanted lists for people who meet the arrest criteria rather these are the sources to know about any activity of concern and individuals who are subject to arrest. 

Real-time monitoring of these lists facilitates timely resolution of suspicioun referring towards any direction of financial fraud. 

  1. Biometric Enabled Screening

Containing millions of records. Watchlists are designed to consolidate records, overcoming the challenge of complex name matching and handling aliases. And transliteration issues that any other AML software encounters.

Final Word

“It’s easy to do more initially but harder to reduce unnecessary screening and reduce risk with limited information available”. 

Keeping in view the drawbacks of non-compliance and strategies to amplify risk guard. There exists a compelling need to carefully abide by global watchlist screening regulations. And law enforcement protocols suggested for financial institutions in order to compete with advanced criminal practices.