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Published: August 27, 2025
In today’s rapidly shifting geopolitical landscape, sanctions compliance has emerged as one of the most dynamic and high-stakes areas of financial crime risk management. What was once a relatively stable regulatory obligation has evolved into a strategic priority, one that can define a firm’s ability to operate, compete, and maintain trust in global markets.
The global sanctions environment has changed dramatically. Sanctions are now being deployed with greater speed, frequency, and political intent. Entire sectors can be targeted overnight. Designations often span multiple jurisdictions, creating legal conflicts and operational uncertainty. For financial institutions, this is no longer a back-office compliance issue – it’s a boardroom concern.
The implications are profound. A single misstep can lead to more than just regulatory penalties. It can result in reputational damage, loss of market access, strained client relationships, and increased scrutiny from regulators and counterparties alike. In this environment, sanctions compliance is not just about avoiding enforcement, it’s about protecting your licence to operate.
To meet this challenge, firms must build two core capabilities:
The ability to rapidly interpret, assess, and implement new sanctions obligations across jurisdictions, business lines, and client portfolios. This requires not only technical capability but also strong internal coordination and decision-making frameworks.
The strength of systems, controls, and governance to withstand scrutiny from regulators, clients, and the public. This includes having clear escalation paths, defensible decision-making, and the ability to demonstrate compliance under pressure.
Too often, firms focus narrowly on screening tools and alert management, while underinvesting in the broader ecosystem of governance, training, and strategic oversight. But in today’s environment, a reactive or fragmented approach is no longer sufficient.
At First Derivative, we work with clients across the FinCrime space to transform sanctions compliance from a reactive burden into a strategic capability. Our approach is both tactical and forward-looking, helping firms respond to immediate challenges while building long-term resilience.
We support clients through:
We help build and refine sanctions compliance programs that are aligned with regulatory expectations and tailored to the firm’s risk profile and operating model.
During periods of heightened activity, such as new sanctions packages or remediation exercises, we provide experienced personnel to support investigations, triage, and decision-making.
Our goal is to help clients not just comply – but lead. By embedding adaptive, risk-based approaches, firms can build trust, protect their reputation, and position themselves for long-term success in an increasingly complex world.
Sanctions compliance will be a central theme at the upcoming Financial Crime Summit by 1LoD in London on 11th September, reflecting its growing importance across the financial crime landscape. We’re proud to be exhibiting and look forward to engaging with peers, clients, and regulators to explore how the industry can respond collectively and effectively.
As global politics continue to evolve, one thing is clear: expectations are rising, and tolerance for failure is shrinking. The firms that will thrive are those that treat sanctions not as a checkbox, but as a strategic capability – integrated into their risk culture, governance, and long-term vision.
If you’re looking to strengthen your sanctions compliance posture or prepare for what’s next, we’d love to start a conversation. Reach out to the First Derivative team or connect with us at the 1LoD Defence event.
Kody Mcdowell
Principal Consultant | Financial Crime
First Derivative
First Derivative LinkedIn profile
Nicola Magennis
Practice Lead | Financial Crime Change
First Derivative LinkedIn profile
