What is typically monitored to identify suspicious activities in a financial institution?

The correct choice focuses on monitoring all transaction types and patterns because this comprehensive approach allows financial institutions to detect a wide range of suspicious activities. By analyzing every transaction rather than just specific types or thresholds, institutions can uncover irregularities that might indicate money laundering, fraud, or other illicit activities.

Monitoring various transactions enables the identification of patterns and anomalies that, when viewed in aggregate, can be very telling. For instance, while a single transaction may seem innocuous, it may raise suspicion when examined alongside other transactions involving the same client or group of clients. This holistic view is essential in the context of Anti-Money Laundering (AML) compliance because criminals often employ multiple methods to obscure their activities, making it crucial to look beyond just high-value transactions or established customers.

In contrast, monitoring only employees, long-standing customers, or high-value transactions could lead to gaps in oversight, where suspicious activities might be overlooked. Such targeted monitoring may not capture the full spectrum of activities that may warrant investigation. Therefore, a broad monitoring strategy is essential for effective AML compliance within a financial institution.