From a practical point of view, global watchlists shape how you onboard customers, monitor activity, and make decisions about who your business can legally and ethically deal with. You’re expected to screen names during onboarding, repeat that process regularly, and respond quickly when updates roll in.

It’s easy to underestimate how often these lists change. Sanctions decisions can happen overnight and missing an update can leave your firm exposed. That’s why automated screening tools aren’t a luxury anymore – they’re your frontline. But tools alone aren’t enough. You need to know how to interpret a hit, how to escalate, and how to evidence your decision-making.

Here’s where AML compliance managers often get caught out: not all watchlist hits are equal. A common name match to an OFAC listing with zero additional identifiers? Low risk. A close match with overlapping address and DOB on a UK sanctions list? That’s going straight to your MLRO and probably on to your board. You need a policy that sets out how to rank hits, and a team that’s trained to handle them consistently.

When regulators review your systems and controls, they’ll look at how you manage screening. But they’ll also dig into what you do after a potential match is found. Was the customer flagged? Was the case documented properly? Were any suspicious activity reports filed? Did you act quickly and proportionately? 

And remember: if you’re a UK regulated business, you’re subject to the Office of Financial Sanctions Implementation (OFSI). They expect you to act without delay if you find a match. That means having clear reporting lines, fast escalation routes, and a shared understanding of your obligations across compliance, onboarding, and even sales teams.

To stay on top of this, consider regular refreshers for your screening software, cross-check your internal risk appetite with the kinds of watchlists you’re screening against, and carry out a periodic audit of how your team handles alerts.