factors THAT CAN CONTRIBUTE to AN ineffective transaction monitoring system

By Ehi Eric Esoimeme, Managing Partner, Chief Trainer and Consultant at E-Four and AAF

Procedures for monitoring, detecting, and reporting suspicious activity should be effective. Banks are required to implement transaction monitoring procedures and file reports of suspicious activity with the Financial Intelligence Unit. Like other anti-money laundering filings, SARs play an important role in detecting possible criminal activity. Financial Intelligence Units and law enforcement agencies use SARs to investigate money laundering, terrorist financing, and other serious criminal activity.

Several factors can contribute to a Bank's ineffective transaction monitoring system. They include the following:

1. The bank’s transaction monitoring system contained account opening information and customer risk profiles that were frequently incomplete, inaccurate, and lacked sufficient analysis and validation, and because of the incomplete and inaccurate information, when the bank’s automated transaction monitoring system generates alerts on certain customers, analysts in the compliance department may not be able to determine effectively when a change in those customers’ activities should have resulted in a change to those customers’ risk ratings.
2. The anticipated account activity for some customers often does not match the actual transaction activity. This may result in the generation of an unmanageable number of alerts that includes large numbers of false positives.
3. The AML monitoring system failed to capture critical information about foreign currency-denominated wires, such as sender and recipient information and the country of origin and destination.
4. Manipulation of system output through use of alert caps on both profiling and query detection methods that could potentially result in missed suspicious activity reports and potential regulatory action resulting in fines, consent order, and significant historical review of transactions.
5. Where the Bank lacks the staff needed to review the alerts that were generated relating to potentially suspicious activity. This may result in the Firm’s failure to adequately review certain cases of potentially suspicious activity triggered by its automated monitoring system and to make reasonable determinations whether or not to file suspicious activity reports (SARs). Inadequate staffing may lead to a significant backlog of alerts and decrease Bank ability to file SARs in a timely manner.
6. Failure to adequately tailor the parameters and thresholds of the alerts generated by the system to match the high-risk activities it sought to identify and control.
7. Failure to validate or independently test the system’s parameters and thresholds to reduce the number of false positive alerts the system generated.

The Certification Courses on Financial Crime Compliance by E-Four and AAF will discuss measures that are critical to preventing money laundering. These courses include:
• CFC - Certified in Financial Crimes and Fraud Prevention ™
• CAMC- Certified Anti-Money Laundering Consultant ™
• CDDP - Certified Due Diligence Professional ™
• CAMA - Certified Anti-Money Laundering Auditor ®
• CCO - Certified Compliance Officer ®
• CMRA - Certified Money Laundering Risk Consultant ®
• ChFI - Chartered Fraud Investigator ®

Benefits
• Successful completion of a GAFM ™ course makes you a Certified Professional in the relevant subject matter.
• You can use the assigned designation on your business card and resume
• Up to 22 months membership to the GAFM ™ professional body
• Access to the GAFM ™ network and body of information online
• Gold Embossed Certificate with your name and designation as MGAFM (Member of the Global Academy of Finance and Management)
• Free access to the E-Four and AAF digital financial newspaper for 1 year. This newspaper will be released 2 times in a year. First part will be released, June 2022.

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Each day will have two sessions. Session 1 will start from 10am and end at 12pm with a 1 hour break from 12pm to 1pm while Session 2 will begin from 1pm and end at 4pm,

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The Training Fee for each of the Training Programmes is 1200 $US. There are discounts for group registration.

For more details, please find attached our Training Calendar for January and February, 2022.

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