Adherence to compliance regulations is no easy feat for financial institutions. The compliance team depends on immense accuracy and timely information to get their tasks done properly – and the right tools can lead them out of the darkness. An AML transaction monitoring solution has the ability to sift through millions of transactions, match them against risk profiles, and automatically identify suspicious behaviour in real-time or on a scheduled basis, while minimising false positives.
It’s critical that the AML transaction monitoring solution identifies and alerts the financial institution of any transaction that may lead to money laundering, fraud, and/or terrorist financing. The best types of AML transaction monitoring solutions include integrations with sanctions & watch lists, a robust rules engine with AI capabilities for customer profiling, a comprehensive workflow with full audit trail for investigations, and real-time alerts which will, undoubtedly, make the compliance team’s lives easier to detect suspicious transactions.
All transactions should be monitored based on a combination of customer profile and risk level, with specific details relating to customer behaviour and transaction detail taken into consideration. When a transaction is flagged, an alert should be generated and the investigation procedure to resolve the case should take place. This procedure needs to be clearly defined in a written policy and enforced beforehand, so that quick and accurate action can be taken when suspicious transactions are flagged.
Streamlined investigation process
It is important that the compliance team investigate each and every alerted transaction. The AML transaction monitoring solution should provide account and transaction activity statistics on the customer in question, so that the information required for an investigation is all in one central system. Furthermore, financial institutions need to create a centralised investigative unit to follow-up on these flagged transactions while a standard protocol needs to be in place for all investigations.
In serious cases, these investigations can lead to the filing of a Suspicious Activity Report (SAR), an important source of information for law enforcement agencies to initiate action. That is why it is critical for investigators to collect all relevant information, prepare the report, and submit it to senior management so they can decide whether or not to file a SAR. The ideal AML transaction monitoring solution is able to export key information into the format of a SAR report at the click of a button.
The compliance manager should have a global view of all the data collected through the transaction monitoring process. This dashboard should illustrate the number of flagged transactions, false positives, true positives, SAR filings, and rule performance so that the AML transaction monitoring solution can be continuously fine-tuned. Finally, it is crucial to measure how investigators resolve cases so that it can be shown that follow-up procedures are being maintained with a full audit trail readily available.
ComplyRadar – it pays to comply
ComplyRadar utilises a full risk-based approach to eliminate disruption to genuine customers, detect potential criminal behaviour, and demonstrate full ongoing compliance. It monitors transactions related to individuals, accounts, and entities to detect suspicious activity quickly and effectively, through a fully audited process to inspect and act on flagged transactions. For more information on how ComplyRadar can help you avoid reputational risk and potential fines, contact us today.