Client onboarding and AML
Transaction monitoring alerts
Learning Outcome
5
Support AML compliance and prevent financial crime.
4
Close or escalate alerts.
3
Investigate AML alerts.
2
Identify red flags and alerts.
1
Understand transaction monitoring.
Red Flags
A red flag is an unusual transaction, activity, or customer behaviour that appears inconsistent with the customer's known profile or expected business activity. While a red flag does not confirm suspicious or illegal activity, it indicates a higher risk and requires further review to determine whether the activity is legitimate or potentially suspicious.
Alert Investigation
An alert investigation is the process of reviewing a transaction or customer activity after a red flag has generated an alert. An AML analyst examines the transaction, customer profile, and supporting information to determine whether the activity has a legitimate explanation or should be escalated for further investigation.
Alert Closure
Alert closure is the final stage of the alert investigation process. After reviewing the transaction and supporting information, the AML analyst documents the findings and closes the alert based on the outcome.
An investigated alert is generally closed in one of two ways:
False Positive – The transaction is found to be legitimate, and no further action is required.
Escalation – If the activity remains suspicious, the alert is escalated for further investigation and regulatory reporting, if necessary.
Summary
5
Support AML compliance and prevent financial crime.
4
Close false positives or escalate alerts.
3
Investigate alerts and customer activity.
2
Identify red flags for review.
1
Monitor transactions for suspicious activity.
Quiz
Which of the following is a possible outcome of an alert investigation?
A. Portfolio valuation
B. Trade settlement
C. False Positive
D. Dividend distribution
Quiz-Answer
Which of the following is a possible outcome of an alert investigation?
A. Portfolio valuation
B. Trade settlement
C. False Positive
D. Dividend distribution
