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Refiner’s Gold 

Episode 3: The AML Usual Subjects 
 

Part 1: The Line Up

2/13/2024

Episode 3 The AML Usual Subjects Part 1 - The Line Up 

In many banks,  95%-98% of Anti-Money Laundering alerts are legitimate transactions mistakenly flagged as anomalous and that require a triage by an investigator. These are the AML alerts from Transaction Monitoring Systems, which play a crucial role in fighting financial crime and helping banks comply with industry regulations. These systems are designed to examine large amounts of transactional data in search for anomalies that may indicate potential money laundering and other illegal activities.

However, a major challenge to the effectiveness of TMSs is due to the scale of their operations and the scarcity of contextual data, leading to huge numbers of false positives or “unproductive alerts.” 


These unproductive alerts not only create unnecessary work for AML teams and divert attention away from genuinely suspicious activities, but they also can accidently cause investigators to view good customers as the “bad guys”.

Metaphorically, it’s like a law enforcement agency bringing in a few individuals for a line up and investigating them based on an anonymous tip with very vague descriptions: “he had brown hair,” “He was about 6-foot-1,” or “he was wearing a cowboy hat.”

 

Join us on a mysterious journey as we delve into the investigative drama behind transaction monitoring alerts in this new episode.
 

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