What does ongoing transaction monitoring involve?

Ongoing transaction monitoring is a critical component of anti-money laundering (AML) and compliance processes, as it involves continuously reviewing transactions as they occur. This continuous review is done against established risk indicators to detect suspicious patterns or activities that may indicate money laundering or other financial crimes.

By using data analytics and monitoring systems, financial institutions can identify transactions that do not fit the normal behavioral patterns of their customers. This proactive approach allows for timely investigations into potentially suspicious activities, ensuring that regulatory obligations are met while also protecting the integrity of the financial system.

The other options do not reflect the comprehensive nature of ongoing transaction monitoring. For example, random reviews or year-end audits do not adequately capture real-time risks or suspicious activities as they develop. Similarly, only addressing transactions flagged by customers would miss many suspicious activities that do not require customer intervention. Continuous monitoring strikes a balance of oversight and responsiveness that is crucial in AML efforts.