IAT Watch List Filtering, an OFAC monitoring tool, was introduced by Fiserv, Inc. (Brookfield, Wisc.), to assist financial institutions with regulatory and processing compliance with the new International ACH Transaction (IAT) regulations. IAT Watch List Filtering incorporates the analysis of new IAT data fields and is designed to assist users in achieving a higher level of compliance without increasing processing or staffing costs, according to Fiserv.
The solution accepts IAT transaction data, compares it across multiple sanction lists and (depending on the deployment model selected) internally maintained "false positive" databases. The data processing and analysis capabilities reduce the occurrence of false positive results, Fiserv says, by employing relative correlation (also known as fuzzy logic) functionality to create match confidence scoring. With a reduction in false positives, back-office investigative work, processing holds and unnecessary negative customer impact are minimized, according to Fiserv. In addition to direct installations the IAT Watch List Filtering solution is currently available on Fiserv's Cleartouch Signature and CustomerFile bank platforms from Fiserv.
Responding to growth in the international payments market, NACHA implemented IAT, a unique Standard Entry Class (SEC) code, for the purpose of clearly differentiating international payments from domestic transactions. To help safeguard the U.S. financial system from abuses involving international payments (including money laundering and terrorist funding) all financial institutions must analyze information contained within the IAT transaction and compare them with government lists to ensure that no funds are transferred into or out of accounts blocked in accordance with OFAC sanctions.
Aaron McPherson, practice director for payments at IDC Financial Insights, noted in a press release, "International money transfers of any kind pose potential operational risks for financial institutions. The addition of the new IAT format creates a new kind of risk, and it will be important to have reliable means of preventing illegal transactions. Integrated watch list filtering will help banks keep pace with the dynamic nature and risk of money laundering activities and other financial crimes."
"IAT Watch List Filtering automates the process to ensure alerts are immediately distributed to staff when suspicious transactions are identified. This allows for increased efficiency and improved customer service through quicker investigations and reduced processing holds," said John Filby, president, Risk Management Solutions, Fiserv, in a press release.