Risk & Transaction Monitoring
What are the key elements of a risk-based AML strategy?
Last Updated: November 2, 2025Identification and Assessment of ML/TF risks, Implementation of Tailored Controls, Prioritization of Resources (staff, technology) based on risk scoring, Monitoring,...
How do you handle high-risk customers?
Last Updated: November 2, 2025They must be subject to Enhanced Due Diligence (EDD), which includes obtaining additional source of wealth/funds documentation, more frequent periodic...
What are ‘Red Flags’ in AML monitoring?
Last Updated: November 2, 2025Red Flags are predetermined warning signs or triggers indicating a potential risk of money laundering. Examples include rapid movement of...
Explain the concept of ‘Transaction Monitoring’.
Last Updated: November 2, 2025It is the continuous, systematic review of customer transactions against defined rules, typologies, or risk thresholds to identify and flag...
What is the significance of customer risk profiling?
Last Updated: November 2, 2025It is essential for categorizing customers to apply the appropriate level of Due Diligence (CDD/EDD) and monitoring. Accurate profiling ensures...
How do you evaluate the effectiveness of AML controls?
Last Updated: November 2, 2025By conducting regular independent audits, reviewing the quality/closure rate of alerts and SAR filings, testing adherence to policies/procedures, and measuring...
What are some common indicators of money laundering?
Last Updated: November 2, 2025These are known as red flags, such as: unusual transaction patterns (size, frequency), high volumes of cash deposits/withdrawals, transactions with...
How does a risk-based approach improve AML compliance?
Last Updated: November 2, 2025It ensures efficient allocation of limited resources by focusing the highest levels of due diligence and monitoring on the highest-risk...
What factors should be considered when assessing customer risk?
Last Updated: November 2, 2025Key factors include the customer’s Geographic Location (high-risk jurisdiction), Nature of Business/Occupation, Product/Service Usage, Expected vs. Actual Transaction Activity, and...
How do you conduct a risk assessment for AML?
Last Updated: November 2, 2025By taking a holistic view of inherent risk (customer type, product, geography) and residual risk (control effectiveness). The process involves...
