Podcast Summary: Fintech Insider Episode 1010

"Insights: Sanctions: how can fintechs keep up?"
Date: October 30, 2025
Host: Kate Moody (11:FS)
Guests:

• Katharina Prenic (Head of Regulation and Policy, Economic Crime, LexisNexis Risk Solutions)
• James Dodsworth (Senior Manager, Financial Crime, Thistle Initiatives)
• Emil Dow (Principal Consultant, Head of Sanctions, Fintrail)

Episode Overview

This episode explores the rapidly evolving world of sanctions compliance for fintechs. Despite a notable slowdown in new global sanctions designations in 2025, compliance remains as complicated—and critical—as ever. The panel unpacks the latest data, discusses enforcement trends, and dives deep into practicalities for fintechs aiming to remain agile, compliant, and prepared in a shifting regulatory landscape. Key focus areas include the ongoing complexity of compliance, the growing divergence between regional sanctions regimes, the challenges of enforcement, and the increasing role of AI and automation in managing risk.

Key Discussion Points & Insights

The Current Sanctions Climate: Slowdown ≠ Simplicity

• Sanctions Updates Dropping (00:14–10:12)

  • 2025 saw a 40% decrease in new sanctions designations—the sharpest drop in three years, per LexisNexis Risk Solutions' Sanctions Pulse report.
    • "We recorded 113 list updates... That’s 23% decrease compared to 146 updates for the first half of 2024. More notably... a 40% drop from the 2,340 net additions we saw in the same period last year."
      —Katharina Prenic, (08:00)
  • Despite fewer entries, the complexity of ongoing modifications, delistings, and regional divergences keeps compliance teams under pressure.

• Not Just Fewer New Entries:

  • Russia-related sanctions predominate. E.g., 92% of EU and 106% of OFAC designations were Russia-related (reflecting secondary sanctions).
  • Large-scale delistings (like Syria's 518) and targeted actions (e.g., 629 ships flagged as 'shadow fleet vessels') add a new kind of workload.

Memorable Quote

"Fewer new designations doesn’t necessarily mean compliance just got easier. If anything, the work can be harder."
—Kate Moody, (00:41)

Why Sanctions Compliance Matters for Fintech

• Gatekeepers of Global Finance (06:45)
  • Banks and fintechs form the front line, enforced by local and international regulations; lapses result not just in fines but also legal and reputational fallout.
    • "If a sanctioned individual or entity can access financial services, they can move money, conduct fraud, evade justice, or continue harmful activities."
      —Katharina Prenic, (07:05)
  • Strict liability means ignorance is no defense—regulators expect thorough risk assessments and justification for any gaps in screening.

The Shifting Nature of Risk and Enforcement

• Compliance is More Complex, Not Less (13:53)

  • Nature of updates is changing: more alterations, delistings, and complex corporate ownership webs; region-based divergences add layers.

• Evasion Tactics Evolve (11:38–13:53)

  • Maintenance packages now target evasion networks and close sanctions loopholes.

  • Sanctioned parties employ shell companies, proxies, crypto, and cross-border transfers to escape restrictions.

  • "Firms need analytic capability—a layered approach: behavioral monitoring, adverse media, beneficial ownership analysis."
    —Katharina Prenic, (15:37)

• Regional Divergence Risks (21:46–27:31)

  • Since Brexit, UK, EU, and US approaches increasingly differ in timing, inclusion criteria, and delisting processes.

  • For fintechs, this means more lists, more systems, and higher operational burdens.

  • "It’s that 5–10% difference [between lists] that causes problems, precisely because it’s easy to miss."
    —Katharina Prenic, (23:57)

  • Secondary sanctions risk: even non-EU/UK/US fintechs may need to align with key sanctioning jurisdictions due to partners and dollar use.

Building Agile and Adaptive Compliance Programs

• Investment and Innovation Trends (28:22)

  • Fintechs are investing in tooling, continuous learning, and knowledge-sharing, but challenges persist: costs, regulatory expectations, and system integrations.

• Culture and Risk Assessment (17:45–19:48, 42:16–43:24)

  • Compliance ethos varies: from “bare minimum” to proactive, AI-empowered, holistic approaches.
  • Strong risk assessments and whole-business involvement are key:
    • "Don’t just silo it into the compliance function... pull in people from the front lines."
      —James Dodsworth, (43:24)

• Best Practice Note

  • "The organizations excelling in sanctions are the ones who prevent evasion rather than just react... They proactively build out typologies and transaction monitoring rules."
    —Emil Dow, (30:32)

The Role of AI and Technology (33:08–40:56)

• AI as an Enabler, not a Panacea

  • AI can speed up list updates, rescreen historical transactions, and prioritize real risks with network analysis and fuzzy matching.

  • Pattern recognition, anomaly detection, and predictive analytics can offer a major advantage—if properly configured and explained.

  • "AI won’t make anything magically disappear, but it can enable real-time responsiveness and reduce false positives."
    —Katharina Prenic, (33:29)

  • However, poor implementation of regtech tools remains an issue; regulators want oversight, customization, and demonstrable understanding of these tools.

    • "If it’s using AI, the regulator will want to see you understand how it’s making decisions."
      —Emil Dow, (37:30)

• Build vs. Buy

  • It’s less about whether tools are built in house or bought, more about calibration to risk profile and robust oversight.

Timestamps of Important Segments

| Timestamp | Segment/Topic | |-----------|-----------------------------------------------------------------------| | 00:14 | Episode intro; scope of sanctions environment | | 06:45 | Why sanctions matter for financial services; slowdown context | | 13:53 | Compliance complexity in response to sanctions maintenance, not drops | | 21:46 | Regional divergences and practical impact on fintechs | | 28:22 | Agility, investment, and culture around compliance | | 30:32 | What best-in-class sanctions compliance looks like | | 33:08 | The role of AI and automation | | 41:29 | Final recommendations |

Notable Quotes and Speaker Attribution

• On the evolving nature of sanctions compliance:
  "Fewer new designations doesn’t necessarily mean compliance just got easier. If anything, the work can be harder."
  —Kate Moody, (00:41)

• On fintechs' responsibilities:
  "If a sanctioned individual or entity can access financial services... they can move money, conduct fraud, evade justice, or continue harmful activities."
  —Katharina Prenic, (07:05)

• On system risks:
  "Sanctions are in place for a reason... If the system breaks... that results in the delivery of goods into Russia and then ending up on the battlefield, that has real world consequences."
  —Emil Dow, (19:48)

• On regional divergence:
  "It’s that 5–10% difference [between lists] that causes problems, precisely because it’s easy to miss."
  —Katharina Prenic, (23:57)

• On AI as a tool, not a silver bullet:
  "AI won’t make anything magically disappear, but it can enable real-time responsiveness and reduce false positives."
  —Katharina Prenic, (33:29)

• On regulatory expectations for tech:
  "If it’s using AI, the regulator will want to see you understand how it’s making decisions."
  —Emil Dow, (37:30)

Practical Takeaways & Panel Recommendations

Katharina Prenic (41:29):

• "Stay sanction ready—monitor regulatory change and best practices, be vigilant for evolving evasion tactics, and keep pace with innovation in compliance technology."

Emil Dow (42:16):

• "Hire true sanctions experts passionate about investigations; treat each new designation as the start of a broader analysis and learning."

James Dodsworth (43:24):

• "Nail your risk assessment, involve the whole business—not just compliance—and truly understand your product risks and controls."

Useful Links

• LexisNexis Risk Solutions: Sanctions Pulse Report
• Fintrail Sanctions Club for Fintechs
• Thistle Initiatives

This episode offers a nuanced view of the 2025 sanctions environment and practical wisdom for fintechs: agility, strong risk culture, and tech-enabled compliance are more vital than ever—even when the headlines suggest a lull.