A Scalable Microservices Architecture for Event-Based Sanctions Screening Systems
DOI:
https://doi.org/10.63282/3050-922X.IJERET-V7I3P106Keywords:
Microservices, Event-Driven Architecture, Sanctions Screening, Financial Compliance, Aml, Kafka, Distributed Systems, Cloud Computing, Containerization, Real-Time ProcessingAbstract
Banking organizations as well as other financial firms are increasingly requiring sanctions screening solutions as they attempt to ensure adherence to ever-changing global regulations as they process massive volumes of transactions in real time. Modern demands on conventional monolithic screening platforms are hard to satisfy because they lack scalability, are slow to process, and have high coupling between parts and low fault tolerance, resulting in inefficiencies and slower compliance decisions. This paper outlines a scalable microservices architecture for event-based sanctions screening systems, built using “cloud-native” design approaches, using asynch event-based communication, and distributed processing to enhance system responsiveness and resilience. The proposed architecture consists of core compliance functions (transaction ingestion, watchlist management, screening, match evaluation, alert generation, case management, audit logging, reporting), as distinct entities which can be deployed independently and use an event streaming platform to connect them. The research methodology involves analyzing the architectural structure, designing microservices, creating a workflow model, and studying the responses to various events and evaluating performance as the number of transactions increases, thereby measuring the services' scalability, availability, and operational effectiveness. The framework includes container orchestration, horizontal auto-scaling, API gateway management, centralized monitoring and resilient messaging, and is designed to facilitate continuous operations and regulatory compliance. Experimental metrics show significant gains in throughput, response times, fault isolation and resource utilization over the traditional monolithic approach with minimal loss of processing power during times of peak transactions. The findings highlight the compelling advantages of event handling microservices in making sanctions screening platforms more scalable, maintainable, and reliable, offering financial institutions a flexible and future-proof framework for real-time compliance, swift regulatory changes, and enterprise-level digital transformation.
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