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Setting up effective AML/CFT transaction monitoring controls

The main challenge in setting up effective AML/CFT transaction monitoring controls

Setting up effective AML/CFT transaction monitoring controls will reduce false positive alerts and increase efficiency.

According to AML law, financial institutions are obliged to monitor their customers' customer activity. Thus, transaction monitoring is a key control in financial institutions anti-money laundering and countering the financing of terrorism policies and procedures. An effective Transaction Monitoring system enables detecting and assessing whether customers transactions pose suspicion according to their profiles. Based on the customer risk level, it's easy to apply relevant monitoring rules for all customers. Customers are divided into small groups, and based on the cluster, relevant rules are applied.

To detect unusual behaviour and transactions, Financial Institutions tend to use external platforms. Transaction monitoring systems also facilitate the holistic reviews of customer transactions over periods and help discover any unusual or suspicious trends, patterns or activities that may take place.

Monitoring starts with setting up a proper framework

Detailed transaction monitoring rules help to manage the volume of alerts and decrease the false positive alerts. To increase the workflow's efficiency, it is essential to ensure that the transaction monitoring framework is set up properly. Therefore, to keep up with the company's growing business volumes, one crucial step is to create a detailed and customized transaction monitoring framework and, most importantly, to follow the legislation rules. Based on an analysis of planned customer profile and business plan, our team in Complok can help with consultation and recommendations by:

  • Setting up detailed transaction monitoring rules based on guidelines ensuring that rules are compatible with software;

  • Overviewing transaction monitoring software rules to increase efficiency and reduce false-positive alerts;

  • Providing recommendations for widening transaction monitoring rules framework necessary to keep up with planned rapid growth of business volumes.

Contact us for a consultation: +372 5554 5709

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