Which of the following is considered a red flag in AML practices?

Frequent transactions that do not match a customer's profile are indeed considered a red flag in Anti-Money Laundering (AML) practices. This type of activity can indicate suspicious behavior, as it diverges from the established pattern of normal transactions for that customer. For example, if a customer typically makes small purchases and suddenly starts conducting numerous large transactions, it raises questions about the source of those funds and whether the transactions are legitimate.

In the context of AML, financial institutions are required to monitor customer behavior and report any irregularities that could suggest money laundering or other illicit activities. By identifying such discrepancies in transaction patterns, institutions can take proactive measures to investigate further or alert authorities as necessary. This vigilance is part of a broader compliance strategy aimed at detecting and preventing financial crimes.

Consistent customer engagement, low-value transactions across multiple accounts, and routine deposits into savings accounts may not inherently signal suspicious behavior, as they can represent normal banking activity for a variety of customers. In contrast, the specific mismatch between transaction frequency and a customer's established profile is a critical indicator that demands further scrutiny.