Transaction monitoring is a key component in financial crime compliance, used by financial institutions to detect suspicious activities such as money laundering, fraud, or terrorism financing. This process involves continuously reviewing customer transactions – such as deposits, withdrawals, and wire transfers – to identify patterns or anomalies that could indicate illicit behaviour. 

By using advanced monitoring systems, institutions can flag unusual activity, such as large or frequent transactions, transfers to high-risk countries, or deviations from a customer’s normal behaviour. When such activities are detected, they are investigated and, if necessary, reported to regulators through suspicious activity reports (SARs). Transaction monitoring ensures that financial institutions comply with anti-money laundering (AML) and counter-terrorism financing (CTF) regulations. It plays a critical role in safeguarding the financial system from being exploited for illegal purposes, helping organisations manage risk while maintaining compliance with regulatory requirements.