Transaction Monitoring System – A Step Forward to AML Screening

Whether someone is a software developer or an accountant, money laundering is not a new term to them. Everybody knows that laundering illegal funds is a crime, and regulatory bodies are continuously adding new policies …

Whether someone is a software developer or an accountant, money laundering is not a new term to them. Everybody knows that laundering illegal funds is a crime, and regulatory bodies are continuously adding new policies and taking strict measures to avoid such criminal acts. 

A transaction monitoring system enables banking and financial firms to check their clients for nay high-risk transactions. It acquires the user to provide personally identifiable information along with the financial profile to analyze their level and predict the behavior of their future transactions. As the customer transactions are screened is performed in real-time, it also produces a suspicious activity report as per the information provided by the clients which are then sent to the regulatory bodies for further investigation. 

Who Needs Transaction Monitoring System?

Any firm that deals with money directly or indirectly is obliged by the regulatory bodies to take some essential steps to secure their clients from identity theft, data breaches, and other criminal activities. Here are all those companies that require KYT verification solutions to avoid financial crimes.

  1. Money Sevices

These are the firms other than banks that transmit or convert money. They have to follow regulations to that they have been obligated. They are under strict observation of the regulators who demand them to stay compliant with the changing legal landscape. Thus, know your transaction system would really help them to avoid financial crimes as well as hefty fines. 

  1. Traditional Banks

Banks are known to be a place where users can deposit their cash, and transfer or withdraw funds whenever they want to. Besides these services, banks also help clients to apply for different insurances like home or vehicle insurance. In case the banks are not up to the demands of the users and have been badly exploited by the criminals, just lose the trust of clients. They would go to another facility that provides them with greater experience while not compromising their security. Thus, keeping all this in mind, banks are now shifting toward advanced security systems such as transaction monitoring solutions to prevent illicit transactions and improve the country’s economy. 

  1. Financial Firms

These services provide customers and businesses with economic features. Many firms come under the financial sector which allows users to get the financial goods and services they need. For example, they allow people to transfer money using credit cards or electronically. But with the digital systems, fraudsters have also become smarter. They are leaving no stone unturned to exploit financial firms and carry out nefarious activities. This is where transaction monitoring software really helps to mitigate heinous crimes.  

  1. FinTechs

Fintech means offering financial services using technology instead of conventional manual processes. As criminals are destroying businesses for illicit purposes, fintech is not an exception. They have just become a breeding ground for criminals. Adopting advanced transaction monitoring and AML solutions could help the industry avoid financial crime to a greater extent. 

  1. Lending Firms

These companies provide customers with loans as per their needs. For instance, when any user wants to buy a home but is out of budget, they go to the lending firms for help. As the firms again deal with money, they are at a higher risk of being destructed by criminals. Having verification solutions such as transaction monitoring would really benefit the company avoids fraudulent and criminal activities while staying compliant with global regulations. 

  1. Exchanges

These are the companies where commodities, securities, and other financial instruments are exchanged or traded. Their function is to ensure fair trading and efficient dissemination of information. Thus, having a transaction monitoring system in place helps them a great deal. Besides avoiding criminals, it prevents them from penalties that could be imposed on them in case they do not follow regulations. 

  1. Cryptocurrencies

In this tech-driven world, cryptocurrencies have become much popular and are used as a digital exchange. Criminals are entering these firms too to gain their illicit means. With the help of AI-based AML transaction monitoring software, cryptocurrencies could keep all criminals while ensuring enhanced security services and a greater user experience. Moreover, this helps them build credibility and reach greater heights in the competitive world market. 

Final Thoughts

Financial institutions conduct thousands of transactions on a regular basis, which makes manual verification processes impractical. They can instead use an automated transaction monitoring system to keep track of the movement of all these transactions. Businesses now have to monitor AML transactions as a legal requirement, and they can define know your transaction limitations. If a transaction violates the rule, the system creates an alarm, and the regulatory department is notified, which takes the necessary action. By analyzing the consumer profile and distinguishing between typical and suspicious circumstances, the transaction monitoring system helps to reduce false positives and is indeed a step ahead of AML screening. 

Leave a Comment