Suspicious activity monitoring is a cornerstone of a robust AML/CFT program and is crucial in detecting and reporting money laundering, terrorist financing, and fraud. As the Federal Financial Institutions Examination Council (FFIEC) states in its examination manual, monitoring and reporting suspicious activity is critical to the United States’ ability to combat financial crime. The end game for an investigative team is to detect illicit activity and file suspicious activity reports (SARs), which ultimately assist law enforcement in stopping criminals in their tracks.
The Financial Crimes Enforcement Network (FinCEN) and federal bank examiners understand that financial institutions can't detect all suspicious transactions. However, solid policies, procedures, and processes must be in place to monitor higher-risk products, services, customers, and geographies, in addition to understanding and detecting fraud typologies. This means that financial institutions’ suspicious activity monitoring systems must be risk-based and efficient, and this is where a shared case management approach becomes critical.
As financial crime becomes increasingly sophisticated, financial institutions must rethink how they manage risk. One critical shift is the integration of fraud and AML/CFT alerts through shared AML case management systems. This approach is not just a best practice; it’s quickly becoming a necessity for effective compliance. Shared case management helps streamline processes, reduce duplication, and improve communication between fraud and AML/CFT teams. It also directly responds to evolving regulatory requirements, especially with fraud now included in FinCEN’s national priorities.
