Transaction monitoring process consists of 7 primary steps is all about :
1) Identifying suspicious transactions alerts and understanding these transaction monitoring alerts
2) Search previous transaction alerts or SAR against customer (If any)
3) Consolidation of customer profile information, 4)
4) Transaction review & analysing usual transaction patterns,
5) Detailed investigation to identify source and
6) Understanding the relationship between customer and parties involved in transaction
7) finally taking decision on the suspicious transaction alert.
It is generally not so easy to detect unusual or suspicious transaction that may lead to Money laundering and other predicate offence. While establishing Transaction Monitoring system, the most critical steps is to define initial set of transaction monitoring rules.
And, defining transaction monitoring rules is quite cumbersome job as every bank would have different risk factors i.e. product risk, geography risk, customer or entity types etc.
In the video, We have covered basic definition of Transaction monitoring in AML, Risk based approach in Transaction monitoring, key red flags, sample transaction monitoring scenarios, Transaction monitoring red flags and transaction monitoring process in financial institutions.