Transaction monitoring systems process payments in real time or batches, screening transactions against pre-set rules to spot suspicious patterns.
Configuring Rules and Statistical Detection Models
Compliance programs use scenario-based rules alongside statistical baseline profiling to monitor activity:
  1. Threshold Rules: The system triggers an alert if a transaction exceeds a specific numeric threshold. For example, a single transfer over $10,000 flags for potential regulatory reporting.
  2. Velocity Rules: The system triggers an alert if a high number of transactions occur within a short window. For example, an account receiving ten consecutive transfers under a reporting limit within 48 hours is flagged for potential structuring.
  3. Behavioral Deviation: The system monitors for sudden deviations from established account baselines. For example, a retail account that normally handles small domestic transfers suddenly executes a large international wire.

The Standard Alert Triage Workflow
[System Alert Generated] 
           |
           v
[Level 1: Quick Screen] --------> Cleared as False Positive (Log Reason)
           |
           v
[Level 2: Deep Analysis] -------> Escalate to Compliance Director
           |
           v
[Level 3: Legal Filing] --------> Submit Suspicious Activity Report (SAR)

Firms use clear, documented steps to process alerts. This structured approach helps ensure that critical warnings are investigated properly and resolved within legal deadlines.
 
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