Validate Transaction Monitoring Systems of Regulated Entities  Increasing focus on transaction monitoring and Red Flag surveillance processes has seen a global uptake in the implementation of thematic style regulatory reviews on transaction monitoring systems. 

AML Analytics has therefore developed a ground-breaking Red Flag Test designed to carry out a transaction monitoring system health check using Smart Scenarios consisting of synthesised transaction data to validate system performance and ensure suspicious or unusual financial activity is detected.

Each Smart Scenario encompasses multiple Red Flags and covers different transactional behaviour to emulate the typical characteristics of a particular type of financial crime, such as human trafficking, diamond smuggling, drug trafficking or the illegal wildlife trade. Our Red Flag Tests contain synthetic data to mimic the exact transactional patterns of defined money laundering typologies such as the ones mentioned here.

Red Flag Tests created by AML Analytics will facilitate regulatory understanding of each transaction monitoring system’s existing Red Flag assumptions, highlight system inaccuracies and identify incorrect threshold parameters which can cause suspicious or unusual transactions to remain undetected. They will allow a Regulator to identify specific jurisdictional risks and weaknesses, understand emerging AML threats and set an industry benchmark for its regulated entities.

We have collated a unique database of over 10,000 Red Flags that have been defined by regulators, law enforcement agencies and banking associations around the globe. 

Our Red Flag Tests and Smart Scenarios have been created in accordance with best practice recommendations and guidance from international policy makers and FIUs around the globe including FATF, UNODC, OCC, FinCEN, HKMA, and many others.

To find out more, contact a member of the AML Analytics team by clicking on the interactive map

Supervisory Benefits

Using our Red Flag Tests to validate the transaction monitoring systems of regulated entities brings the following benefits for Regulators:

•  Our unique Red Flag Tests are faster and simpler than any other transaction system testing process on the market

•  Smart Scenarios consisting of synthesised transaction data will stress test and validate varying threshold parameters of Red Flags to ensure compliance

•  Testing aligns with and exceeds global best practice recommendations

•  Emerging Red Flags and risk indicators which lie outside existing Red Flag parameters are identified

•  Our testing processes are entirely system agnostic and do not require any access to a regulated entity’s IT systems

•  The testing process does not require customer data, onsite resources or UAT access