How to protect your payment security is the key question in the emerging threat landscape. In this article, Nomentia's Jouni Kirjola answers key questions about securing corporate payments and preventing payment fraud. By exploring both emerging threats and best practices, we offer practical advice on how businesses can protect themselves from fraud attempts, maintain compliance, and strengthen the overall integrity of their payment processes.

What are the main risks treasury teams need to manage?

Treasury departments face four primary risks: liquidity risk (running out of cash), market risk (FX, interest rates, or commodities), operational risk (process, system, or compliance failures), and counterparty risk (failure of banks, partners, or customers). Effective risk management combines forecasting, visibility, controls, and frameworks to minimize these exposures.

How can companies effectively manage foreign exchange (FX) risk?

Effective FX risk management requires visibility into multi-currency cash flows, accurate forecasting, and centralized data. Treasurers increasingly use hedging strategies, liquidity management, and technology platforms to mitigate volatility. Automated reporting and scenario modeling help identify exposures early and enable faster, data-driven hedging decisions.

What is AML sanctions screening?

sanctions lists to prevent financial crimes like money laundering and fraud.

What is PEP and sanctions screening?

PEP (Politically Exposed Person) and sanctions screening identify individuals in high-risk political positions and entities subject to sanctions, helping businesses avoid financial and reputational risks.

When should sanctions screening be performed?

Sanctions screening should be conducted when onboarding new customers, before processing transactions, and regularly to stay compliant with updated sanctions lists.

Is sanctions screening mandatory?

Yes, in many industries and jurisdictions, sanctions screening is legally required. Non-compliance can lead to hefty fines, frozen assets, or criminal penalties.

Who enforces sanctions screening requirements?

Regulatory bodies such as the Office of Foreign Assets Control (OFAC), the UN, the EU, and HM Treasury enforce sanctions screening requirements depending on the jurisdiction.

What happens if a company fails to conduct sanctions screening?

Failure to screen can result in financial penalties, reputational damage, loss of banking relationships, and even legal action.

What kind of data is used in sanctions screening?

Sanctions screening typically checks names, dates of birth, addresses, company names, bank details, and transaction records against official sanctions lists.

Can sanctions lists change?

Yes, sanctions lists are updated frequently to reflect new geopolitical developments, criminal activities, and policy changes. Companies must ensure they screen against the latest versions.

Does sanctions screening apply to small businesses?

Yes. While enforcement varies, any business involved in international transactions, banking, or high-risk sectors should implement screening to avoid legal and financial risks.

How can companies prevent accounts payable (AP) fraud effectively?

Prevention requires a mix of process controls and technology: enforce segregation of duties, use dual approvals for payments, and run vendor validation. Automating reconciliation and applying payment monitoring tools help detect anomalies early, while regular employee training raises awareness of phishing and social engineering threats.