transaction monitoring

The world of payment getaways is advancing so fast that businesses, financial institutions, companies, and organizations want authentic and legitimate real-time transaction monitoring. Many businesses update their working technique and start using new modern and tech-savvy technology in the business infrastructure. 

In the current era, mobile wallets, tokens, and payment wearables have raided the marketplace. These payment gateways highlight the need for real-time transaction monitoring for businesses. 

Importance of the Real-time Transaction Monitoring 

It is not a hidden truth that today’s financial crime is more brutal to defend. The cyber scammer is always searching for loopholes in financial institutions. The regulators are also cracking down on banks or financial organizations that do not follow fraud prevention procedures.

In one report of 2020 from Finbold, bank regulators fined $12bn to different banks because they were non-compliance with KYC and AML risk management procedures. Financial crime is not only a huge money loss for the organizations but also affects the institute’s image in the market. Modernizing your company transaction monitoring solution helps you in AML and KYC verification. It also reduces the time and human capital of performing the same work. 

Payment Transaction Monitoring in AML 

Transaction monitoring has a vital role in knowing your investor (KYI). The transaction monitoring solution helps businesses ensure they are not being abused to clean the black money into white. Financial institutes must have to follow the AML regulations. AML transaction monitoring system helps them comply with all the money laundering and CTF regulations. Banks can easily block accounts or supervise suspicious activities in real-time transaction monitoring software.   

The anti-money laundering AML system works on different rules and algorithms. Every company has its algorithm to reduce money laundering. The better rules lessen the chance of false negativity and false positivity. The risk-based transaction monitoring provides a precise analysis of the risk sensitivity of the business, product, or translation. The customer can modify payment translation monitoring features to add new rules according to company policies.

Payment Transaction Monitoring in KYC 

Real-time transaction monitoring is not only to reduce money laundering. It uses AI technology to monitor transactions and all other activities so you can improve KYC. 

KYC transaction monitoring analyses the customer transaction behaviour of the past and present. According to that collected data, it conducts customer analysis, including risk levels, and expects future activities. Your financial institution never calls you to confirm the specific transition. 

Because of the translation monitoring, they know about your future step. They may contact you and tell authorities about the transaction if they monitor any suspicious activity, such as a large withdrawal and deposit.

Here are some common fraud scenarios examples of how real-time transaction monitoring helps your customer.

A scammer has a credit card and tries to use that in a different country or state. He uses the card out of pattern and withdraws a large amount of money that does not match the regular activity of the customer. In that situation, transaction monitoring solutions identify and give a warning signal.

Another scenario is where the criminal purchases minor items to ensure the card is active. So fraud can not get into the radar, but real-time transaction monitoring detects this and red flags the pattern.  

The real-time transaction also monitors the change in the account owner’s transaction behaviour. As you only use the card to purchase clothes and groceries. Suddenly, a fraudster buys something more expensive than this; it spots suspicious activity and flags the transaction. 

Real-time transaction monitoring quickly spots customer activity that doesn’t match the predictable patterns. It also reduces time consumption by automated updating its process and minimizes false positives chance.

Process of the Real-time Transaction Monitoring 

Real-time transaction monitoring detects all the data related to the transaction and complies that data with risk rules.  

Following are some suspicious activities on which the system blocks or flags the transaction. 

  • If the source of inbound or outbound is unknown 
  • A transaction that surpasses the specific value 
  • Domestic or international random transactions 
  • Strange pattern account activity or transactions
  • Massive cash deposit and withdrawal 

If real-time transaction monitoring detects any of these warnings, it alerts the system for further investigation. The information about these transactions is usually combined in the suspicious activity report (SAR) file. The transaction monitoring software also provides a case management system that helps investigators analyze and review the alerts. 

Last Shot of Real-Time Transaction Monitoring 

Real-time transaction monitoring is essential for businesses and financial institutions to fight against financial crimes and comply with AML and KYC regulations. Using AI and machine learning technology in real-time transaction monitoring helps detect fraudulent and online money scammers. The automating system also reduces time consumption and resources and as well as reduces the chance of false positives.

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