Effective Watchlist Screening

A key theme in 2026 is that watchlist screening is an ongoing risk management challenge that requires better decisioning, better prioritisation, and better use of innovation.

Where firms feel the greatest pressure

• Ongoing monitoring of existing customers emerged as the leading pressure point, cited by 41% of respondents.
• Customer onboarding and account screening followed at 34%, reinforcing the challenge of getting screening right at the very first touchpoint.
• Payments and transaction screening accounted for 24%, reflecting the growing complexity of real-time and near-real-time screening environments.

While onboarding remains essential, the more significant challenge for many firms we heard from is sustaining effective screening at scale. Ongoing screening can generate significantly higher screening traffic, often orders of magnitude greater where customer bases are rescreened daily.

As customer profiles, behaviours, and risk exposure evolve over time, static approaches are no longer sufficient. Screening programmes must continually adapt to manage this scale efficiently, without introducing unnecessary friction or generating unmanageable alert volumes.

Reducing noise without increasing risk

Alert volumes and the effort required to manage them remain one of the biggest barriers to effective screening. When asked what would deliver the greatest improvement to screening over the next 6–12 months, respondents were clear in their priorities.

• 36% identified reducing false positives and improving match precision as the single biggest opportunity.
• 18% highlighted the need for stronger audit trails and more robust evidence packs to support regulatory scrutiny.
• 15% pointed to AI assisted remediation, including summarisation and drafting narratives.
• Improving data coverage across sanctions, PEPs, adverse media and entity relationships was selected by 14%.

Taken together, these responses point to a common challenge that too much effort is still being spent reviewing low-risk alerts, while teams struggle to focus on the cases that genuinely matter.

Innovation is already helping to address this. Advances in false positive reduction, model-led re alerting and AI driven alert remediation are enabling smarter prioritisation, improving consistency and reducing manual effort. The goal is not to remove human judgement, but to apply it where it adds the most value.

Local expectations still matter

While global screening coverage is essential, the UK regulatory environment continues to place specific emphasis on local risk considerations.

Domestic PEP definitions, sanctions exposure and supervisory priorities remain firmly on regulators’ agendas. Firms operating across jurisdictions cannot afford to take a one-size-fits-all approach if they want to meet UK expectations.

This regulatory nuance is reflected in what organisations say they need most to meet current screening requirements.

When asked what type of support would be most helpful:

• 33% selected regulatory developments updates and horizon-scanning support, highlighting the challenge of keeping pace with change.
• 25% said broader data coverage, enrichment or more frequent updates would offer the most value.
• A further 25% pointed to the need for practical training, implementation guidance and configuration support as regulations evolve.
• 17% emphasised the importance of stronger explainability and evidence to support supervisory discussions.

These findings reinforce that effective screening is not just about detection, but about explainability, governance and confidence when engaging with regulators.

Designing screening that is defensible and practical

Regulators are expecting firms to show that their screening programmes are risk-based, well-governed and continuously assessed. That means being able to explain why certain thresholds, lists, data sources or monitoring frequencies are in place and how they align to the firm’s risk profile and regulatory obligations.It also means recognising that manual processes alone will not scale to meet growing expectations. Technology, when used thoughtfully, can help organisations strike a better balance between risk sensitivity and operational capacity.

Technology: Moving from volume to value in screening

Data: The foundation of defensible screening outcomes

The take away: balance over brute force

• Balancing global reach with local regulatory expectations
• Balancing risk mitigation with manageable workloads
• Balancing automation with human oversight
• Balancing technology capability with data quality, recognising that even the most advanced screening tools rely on accurate, current and well governed data
• And balancing innovation with explainability

Firms that get this right will be better positioned to respond to regulatory scrutiny, manage emerging risks, and enable their compliance teams to operate with greater confidence and clarity.