Upcoming Solution: Transaction Monitoring

Overview

Transaction Monitoring holds an important place in a financial institution's AML compliance. Transaction Monitoring is utilized to detect and stop money laundering operations. All financial transaction data, including bank transfers, credit card payments, and other financial activities, are scanned and analyzed using the interdiction software. The technology is meant to detect patterns and irregularities that might be signs of money laundering or other financial crimes like fraud or terrorist financing.

A financial institution's compliance program must include a transaction monitoring process. This involves identifying and reporting any unusual activity that might be a sign of money laundering, terrorist financing, or other financial crimes. Financial institutions can detect and prevent illegal activity, protect their reputation, and comply with regulatory requirements by setting up efficient and robust transaction monitoring systems and processes.

The interdiction software provides financial institutions with technology to recognize patterns of suspicious activity that could be signs of money laundering or other criminal activities. Transaction Monitoring system’s automatically flag suspicious transactions using cutting-edge analytics, machine learning algorithms and artificial intelligence. This allows financial institutions to detect and report any criminal activity and take the necessary action to reduce risk. The process preserves the integrity of the financial system and the public's confidence in financial institutions by identifying and combating financial crimes.

Transaction Monitoring software is configured with a set of guidelines and standards that are used to identify transactions beyond specific thresholds, including large cash flow or a high number of transactions, for additional inquiry. Furthermore, the system compares transactions to a database of individuals and organizations that have been marked as suspicious by law enforcement or financial institutions, as well as a list of designated individuals and entities that are known as money launderers. The system also makes use of data visualization and other features, which continually analyze transactions in real time and update the system with new information. 

Transaction monitoring is used to detect signs of illegal activities, such as:

• Money laundering
• Terrorist financing
• Fraud
• Identity theft
• Drug trafficking
• Corruption
• Bribery
  

To prevent the spread of above activities, financial institutions focus on the following factors when conducting ongoing monitoring:

• Unusual transaction amounts
• Unusual series of transactions
• Unusual geographic destination or origin of a payment
• Known threats or typologies

Transaction Monitoring systems are required to meet the regulatory requirements by the following financial institutions:

• Banks
• Money services
• Investment firms
• Transfer companies
• FinTech companies
• Cryptocurrencies
• Brokerages
• Insurance companies
• Real estate agents