Episode 1
Most AML alerts represent anomalies triggered by a perfectly legitimate customer life story. One of the most prevalent explanations that genuine customers provide for anomalous activity that raises red flags is receiving or sending a gift. But when we looked at the data for gift-related transfer, we found a very odd discrepancy…
When asked to explain a cash transaction, one of the top 5 life stories genuine customers provide is receiving or giving a gift.
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A “Gift In” situation is when a large deposit - often in cash - is explained by the customer as a gift. A “Gift Out” situation is when the customer draws a large amount of cash or transfers a high amount of money, and explains that it was done in order to give a gift, typically to friends or family.
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What’s surprising is the huge gap between “gift in” vs “gift out.
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When looking at the aggregate for all customers, the median amount for receiving gifts is $15,000, but for “gift out” the number jumps to about $40,000!
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Why is there such a huge difference? Why do customers giving a gift have 166% higher transaction amount vs. customers who receive a gift? Aren’t they supposed to be the same?
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We’ll keep this as a mystery for now, but there’s actually a very interesting explanation to this discrepancy. We’ll just give you a hint: it has to do with the AGE of the customer.
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Then there’s another question: how can we know that customers who SAY the reason for their activity was a gift are really telling the truth? Couldn’t they actually be laundering money?
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That’s a great question, and we’ll dedicated episode 2 to that - coming soon!
Meanwhile - stay tuned for more Refiners’ gold, and subscribe to receive them automatically as they get released!
