From hidden relationships to geopolitical risks, the 2024/2025 Sanctions Survey by regtech company Global Screening Services (GSS) reveals the most pressing challenges facing financial institutions.
While sanctions compliance has always been complex, the sheer volume of updates, coupled with the growing sophistication of evasion tactics, is creating unprecedented strain on compliance teams worldwide.
Out of 136 billion annual cross-border transactions, around 40 billion undergo active screening, placing significant pressure on compliance teams. The volume of sanctions updates (rated 3.8/5) and their frequency (3.6/5) stand out as persistent challenges.
Institutions also face challenges in identifying hidden relationships and navigating issues with money services businesses (4.4/5 each). These complexities underscore the difficulties of detecting intermediaries and opaque corporate structures designed to circumvent sanctions
Geographic risks
The GSS survey, conducted in consultation with over 35 international financial institutions, identifies Russia as presenting the highest sanctions risk (4.7/5), followed by Iran (4/5) and China (3.5/5). Other nations flagged include Syria (3.3/5) and North Korea (3.1/5).
Tom Scampion, CEO and co-founder of GSS, said: “Sanctions compliance is more demanding than ever, with financial institutions facing a perfect storm of complexity, volume, and risk. Yet, what’s clear from our survey is that the industry isn’t standing still. With 97 per cent of respondents agreeing that collaboration is essential, financial institutions are utilising shared expertise alongside technologies like AI and cloud solutions to tackle these challenges head-on.
“What’s really encouraging is seeing how financial institutions are adapting. Whether it’s improving data quality or gearing up for regulations like ISO 20022, they’re setting a higher standard for how compliance can work smarter in a more complex environment.”
Further findings
As sanctions screening becomes more demanding, technology is playing a critical role in easing the burden. The survey reveals unanimous agreement among respondents that artificial intelligence (AI) and machine learning (ML) will be pivotal for future compliance efforts. These technologies enable financial institutions to process vast amounts of data quickly and efficiently, reduce false positives and enhance the accuracy of alerts.
Despite the potential, sanctions screening remains a costly and friction-heavy control, with alert rates ranging from five to15 per cent and over 99.6 per cent of these alerts being false positives. AI’s ability to streamline this process has already gained traction, with 45 per cent of institutions adopting or planning to adopt cloud-based solutions. Additionally, 17 per cent of respondents are exploring blockchain technology for its potential to improve traceability and compliance.
The quality of data used in sanctions screening emerged as the second-highest issue (4/5). Financial institutions recognise that unstructured or incomplete data contributes significantly to false positives and missed violations, making accurate, high-quality data essential for effective compliance.
The adoption of the ISO 20022 standard by November 2025 is seen as a significant step forward. This global initiative aims to improve data formatting and structure, enabling institutions to handle vast amounts of information more effectively. By streamlining data processing, ISO 20022 promises to reduce the noise in sanctions screening and improve overall compliance efficiency.
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