A term widely used in the Fintech space is “Transaction Monitoring” and it refers to various automated systems implemented as part of the company’s/institution’s infrastructure and a key element of their AML (Anti Money Laundering)/CFT (Counter-terrorism financing) methodology.
These systems are crucial for the on-going monitoring of the client’s activity, i.e. during its lifetime as a client, and after the initial KYC (Know you client) and onboarding process.
Where does Transaction Monitoring take place?
Example for such a rule will be when a company is offering a virtual bank account for collecting funds from paying customers and transferring them to another destination, it will choose rules that will identify a situation where the client is using his account as “camo” account, i.e the account is not used for an actual business purpose, but instead used a “storage place” for the funds in transition on their way an unknown (or undisclosed by the client).
After an alert is created for a client’s account and activity, it is then investigated by the company’s Compliance department which reviews the activity and also contacts the client for clarifications if needed, after which it will be decided if the client operated in an illegal or suspicious enough manner. The results of the investigation can be a dismissal of the alert, shutting down the client’s account, restricting it and in some cases even reported to the relevant Financial regulator overseeing the company’s activity, as per the local laws.
Our Sekuritance fraud screening and rule engine coupled with the transactional monitoring suite mitigates all of the above.