Payment screening and alert adjudication serve distinct but complementary roles in anti-money laundering (AML) compliance. Payment screening focuses on identifying risks in financial transactions before they are processed, while alert adjudication prioritises and manages the alerts generated by those screening results. Together, they ensure compliant, auditable, and efficient transaction flows.
In Facctum’s ecosystem, payment screening acts as the first line of control, detecting potential sanctions or PEP risks in real time, while alert adjudication provides structured decision logic to review, document, and manage the resulting alerts.
Why This Comparison Matters
Modern payment systems operate in milliseconds. Regulators expect that all transactions are screened effectively before release. However, every match triggers an alert, and not all alerts require escalation. Comparing payment screening and alert adjudication highlights how technology separates genuine compliance risks from false positives, improving operational throughput and auditability.
Purpose and Core Functions
Payment screening ensures transactions do not breach sanctions or regulatory restrictions. Alert adjudication ensures that any flagged alerts from screening are reviewed consistently, logged accurately, and resolved appropriately.
What Is Payment Screening?
Payment screening refers to the process of checking payment messages against sanctions, politically exposed person (PEP), and other regulatory watchlists. It operates in real time, often sub-second, to prevent the release of non-compliant payments.
What Is Alert Adjudication?
Alert adjudication refers to the structured review and prioritisation of alerts raised by compliance tools, including payment or customer screening systems. It applies explainable logic, configurable workflows, and risk scoring to streamline review processes.
Timing and Workflow Differences
Payment screening operates before a transaction is completed. Alert adjudication begins once screening alerts are generated. This sequential relationship defines how data moves through compliance controls and how decisions are captured for regulators.
Table: Comparison of Payment Screening and Alert Adjudication
Parameter
| Payment Screening
| Alert Adjudication
|
Purpose
| Detect risks in transactions before release
| Review, prioritise, and manage alerts from screening systems
|
Timing
| Real-time (pre-transaction)
| Post-screening (after alert generation)
|
Output
| Risk flag or match score
| Reviewed and documented decision
|
Human Involvement
| Minimal for low-risk, manual for escalations
| Primarily human, guided by decision logic
|
Automation Focus
| Detection and matching
| Workflow orchestration and decision explainability
|
This flow ensures payments are both compliant and operationally efficient, risk detection at the first stage, structured review at the second.
Data Consistency and Interoperability
Consistent data across payment screening and alert adjudication systems determines how accurately risks are managed. Shared watchlist data, standardised message formats, and clear audit trails prevent discrepancies.
Unified list management and watchlist management practices further strengthen interoperability.
Learn how structured list governance improves compliance accuracy in Watchlist Management and from insights in Applying Data Management to Sanctions Screening.
Regulatory Expectations
Regulators such as the Financial Action Task Force (FATF), the UK Financial Conduct Authority (FCA), and the Office of Foreign Assets Control (OFAC) expect that both detection and adjudication stages are transparent and auditable.
The FATF’s Forty Recommendations outline the requirement for effective real-time screening mechanisms.
The FCA’s financial crime guidance stresses that firms must document decision-making and escalation pathways.
OFAC’s compliance framework emphasises alert handling consistency as part of sanctions governance.
Common Challenges and How to Address Them
When payment screening and alert adjudication operate as separate processes, inefficiencies can arise. These include inconsistent escalation logic, redundant alerts, and longer case resolution times.
To address these issues:
Align both systems using a unified data schema.
Apply common risk scoring logic to maintain consistency.
Use AI explainability to justify decisions during regulatory audits.
For a deeper look at improving workflow design, read the Smarter Alert Management Software for Compliance Teams blog.
Operational Benefits of Integration
Integrating payment screening with alert adjudication enhances decision efficiency, compliance confidence, and audit readiness.
Benefits include:
Reduced alert duplication and faster transaction processing.
Transparent documentation supporting regulator reviews.
Improved false positive handling through machine learning and explainable logic.
When payment screening identifies potential risks, adjudication ensures those findings are reviewed consistently and recorded with full traceability. Together, they create an accountable compliance workflow.
Summary and Key Takeaways
Payment screening detects real-time transaction risks, while alert adjudication structures how those risks are assessed and recorded. Their integration ensures not only that high-risk payments are stopped before processing but also that every compliance decision is transparent, justified, and auditable.
