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One of the more popular AML seminars is the “Transaction Monitoring – AML Transaction monitoring rules”.
Module 1: What is AML transaction monitoring?
- Transaction monitoring is an ongoing security process that helps companies detect suspicious transactions.
- Transaction monitoring is a process that can help flag suspicious activities such as large cash deposits or wire transfers which could be linked to criminal activity.
- Transaction monitoring helps financial institutions monitor their customers’ transactions and is the most effective way to fight against financial crimes.
- Transaction monitoring is a critical part of AML and needs to be robust to respond effectively to the illegal laundering of funds.
- Transaction monitoring refers to the process of monitoring customer transactions.
- Transaction monitoring answer the questions:
(a) Where did the money come from? And
(b) Where is the money going? - … and much more …
Why is transaction monitoring important for AML?
- AML regulations require businesses to monitor transactions and report suspicious ones to authorities.
- Transaction monitoring helps companies comply with AML/CFT regulations and supports their compliance programs.
- Transaction monitoring is a vital weapon in the fight against financial crime.
- Transaction monitoring is the backbone of Anti-Money Laundering because it identifies the proceeds of criminal activity as it encounters the legitimate global financial system.
- Transaction monitoring proactively safeguards financial institutions from being targeted by criminals and helps maintain compliance required by regulatory bodies.
- As the nature of financial crime continues to grow and regulations become more complex, transaction monitoring becomes more important.
- Transaction monitoring helps financial institutions to remain compliant and avoid regulatory breaches.
- Transaction monitoring helps financial institutions prevent illicit transactions and activities that impact individuals’ lives, communities and the wider economy.
- Transaction monitoring helps financial institutions better understand their customers’ risk profile and patterns of activity, allowing them to direct their monitoring resources more efficiently.
- … and much more …
Transaction Monitoring – Which factors we should consider when examining transactions?
When examining transactions, we shall consider the following factors (the list is not exhaustive):
- Geographical source/destination of funds
- High or inconsistent amounts
- Numerous small transactions that when combined they exceed anticipated threshold
- Nature or type of individual transactions or series of transactions
- Clients’ usual pattern of activities or size of turnover
- Changes in the usual method of communication with client
- Unusual or suspicious transactions that are inconsistent with the economic profile of the customer
- Transactions which fall outside the regular pattern of an account’s activity
- Complex transactions
- Transactions without obvious economic purpose or clear legitimate reason
- Ascertaining the source and origin of the funds credited to accounts
- Cash transactions.
You should also develop techniques to spot “patterns of transactions” also known as typologies and come to a judgement as to what constitutes an “unusual” pattern.
What we expect to detect through transaction monitoring?
Transaction monitoring can be used to detect signs of illegal activities, such as:
- Money laundering
- Terrorist Financing
- Fraud
- Drug trafficking
- Bribery
- Corruption
- Identity theft
- Unusual transaction amounts
- Unusual series of transactions (e.g., a number of cash credits)
- Unusual geographic destination or origin of a payment
- Known threats or typologies
Module 2: Transaction Monitoring – AML/CFT controls
Module 3: AML transaction monitoring process – STEPS to create a transaction monitoring system
Attend our Pre-Recorded Online Course “Transaction Monitoring – AML Transaction monitoring rules”, learn all eleven STEPs of how to build your own transaction monitoring system and gain 5CPDs.
