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What is transaction monitoring?
Watching customers’ payments after onboarding for activity that does not fit.
Onboarding checks who a customer is. Transaction monitoring checks what they do afterwards: payments that are unusually large, frequent or out of character, or that follow patterns linked to money laundering.
Some rules are thresholds set by law. Many countries, for example, require checks or reports on cash payments above a set amount for dealers in high-value goods. Others come from the business’s own risk assessment.
When a transaction is flagged, a person reviews it and decides whether it is suspicious. If it is, it is reported to the country’s financial intelligence unit.