Transaction monitoring is something that most business owners know nothing about. The number of people looking for information online about what is transaction monitoring is surprisingly high. To make it as simple as possible, transaction monitoring is necessary as it counters money laundering risks, together with terrorist financing possibilities. Any financial institution needs to be careful and has to protect its data. Proper transaction monitoring processes have to be in place but what are the very best practices for businesses? Those below are exactly what you are looking for.
Transaction Monitoring Linked To Risk Analysis
You always need to have suitable KYC procedures in place when you deal with financial data. You gather information through the KYC processes and use it through a risk analysis system so that you quickly figure out what has to be monitored and what does not have to be monitored.
Transaction monitoring and KYC procedure tools have to be integrated. This allows all client information to be processed at the same time and a risk level can quickly be determined. The business saves time, guarantees all important information is actually gathered and overall system efficiency is increased.
Using Transaction Profiles
All transaction profiles need to be adequate, just like beneficiaries noted, account details and payment amounts. Even payment frequencies have to be recorded. Transaction monitoring needs to include a proper analysis and tracking of client profiles. These profiles should be very easy to understand and clear, including supporting documents that are provided.
Transaction profiles used need to be as comprehensive as possible. When this is present, users can define various important key parameters like payment regularity, maximum amounts and minimum amounts. Whenever something falls outside of set parameters, the business knows that it has to check the client and the transactions that were recently performed.
Using Online Viewing Rights
Proper transaction monitoring automatically means that a trust office has full access to bank accounts for the targeted company. Before implementation happens, transactions should be possible to be reviewed. The same goes for contracts that were signed or transactions that were already executed. Bank statements are obtained at a specific frequency. This frequency is determined based on the associated risk level.
Adequate Documentation Necessity
Really good records have to be kept in order to show selected transactions, together with the reason why they are selected. The user needs to be able to quickly see the supporting documents, even if they were previously reviewed by someone else. Compliance offers, whenever they have to be involved, can easily take a look at details and see if a problem exists with the transaction that is analyzed.
The audit trail needs to be as comprehensive and as simple as possible. This is done through complete automation and workflow integration. Authority levels, responsibilities and roles can be assigned at every stage of the analysis process. Also, every single remark or decision needs to be recorded.
Being Able To Reassess Previous Transactions
Whenever a suspicious transaction is noticed, the system needs to allow access to previous transactions. This is a fundamental part of the process that should never be neglected. Whenever the transaction monitoring system identifies a problem, a user needs to be able to reassess the past transactions in order to see if there is a problem that was previously missed.
Unfortunately, most businesses make it really difficult to access past transaction data. This only creates a system that is very hard to use and inefficiency is higher than it should be. Always make sure that transaction monitoring includes features to quickly and simply review any desired past transaction.