How to Solve the Biggest Problems in Transaction Monitoring

How to Solve the Biggest Problems in Transaction Monitoring

Transaction monitoring is a critical component of the anti-money laundering program mandated by the Bank Secrecy Act for all financial institutions. Transaction monitoring is the process of keeping track of customer transactions such as transfers, deposits, and withdrawals. Furthermore, transaction monitoring seeks to detect suspicious behavior that may indicate the presence of other financial crimes, such as money laundering and terrorism financing.

Organizations that use ineffective or traditional transaction monitoring solutions face extremely difficult compliance processes and, more importantly, they may face penalties for failing to comply with regulations.


Ready-to-Use Rules

Ready-to-Use transaction monitoring systems can be configured to apply rules based on which the transaction monitoring system can be used. These rules can make the institution’s job much easier, but if they are not prepared in accordance with the institution’s risk tolerance, major issues may arise.


In 90% of cases, traditional transaction monitoring systems are incorrect. This data is massive, and the cost of false positives to organizations cannot be underestimated. The most expensive cost is a waste of time. False positives cost a lot of time and effort.

Cheat System Thresholds

By operating within certain thresholds, it is simple to deceive static, rule-based transaction monitoring systems. Unfortunately, traditional, out-of-date, and reactive rule-based AML systems are particularly problematic in this area. As a result, highly suspicious activities go undetected because sophisticated criminals operate under the radar.

AI implementation is hampered by data

A truly effective transaction monitoring system will rely on a single source of truth for all data. Ignoring flaws in your data is not a viable option. Preparing data for AI deployment is a time-consuming process. Data must be collected with care, and any signs of corruption must be avoided.

Confusion from Different Regulatory Approaches

Different regulators have different perspectives on what is acceptable in transaction monitoring, which complicates compliance. It is critical to understand your regulatory obligations.

Operational Challenges

Due to the pandemic, fintech companies have also faced operational challenges. Because of their growing popularity and growth, regulators have begun to be concerned about compliance within FinTech firms. As a result, regulators took new regulatory actions against institutions such as fintech and neobank firms. In this area, inspections were conducted, and some institutions were penalized for a lack of customer due diligence and for closing transaction monitoring backlogs.

Monitoring AML Transactions Has Become Difficult

The COVID-19 pandemic has persuaded consumers of the convenience and benefits of a digital-first lifestyle, but it has also increased the risks of digital fraud. Detecting this activity with traditional methods is difficult, so an AI-powered Transaction Monitoring solution is essential. Once inside, criminals gradually take over the account, change a notice, update a contact number, and eventually neutralize the card’s legitimate account holder.

Is Transaction Monitoring Required for Anti-Money Laundering Compliance?

Anti-money laundering compliance requires authentication, suspicious activity reporting, and sanctions screening. However, the AML Compliance program would be ineffective if it did not take full use of today’s modern functionalities, such as real-time processing and behavioral analysis. Without them, your business risks more risk, increased work for compliance employees, and increased friction, all of which have a bad impact on genuine consumers’ experiences.

How Can Financial Institutions Address these Issues?

Transaction Monitoring software helps financial institutions monitor their clients’ transactions and is the most effective way to combat financial crime. It also assists businesses in complying with anti-money laundering (AML) and counter-terrorism financing (CFT) regulations, and it supports AML Compliance Programs.

OMNIO monitors millions of transactions in real time and can easily scan for suspicious transactions. If the software detects a suspicious process, it stops it and saves it for later review. This enables businesses to quickly strengthen their AML and CTF defenses.

Here are some of OMNIO’s unique features:

  • With the rule-writing feature, you can set rules and create scenarios without writing a single line of code.
  • It helps you reduce false positive alarms, focus on the right alerts, and reduce your workload.
  • In the same way that your compliance team does, our resolution engine gathers all of the data from your financial institution and analyzes anything unusual or suspicious. We write the evaluation to see if the client is potentially dangerous.
  • With the Transaction Monitoring feature, you can examine the trading of accounts with each other and view the account name, volume, balance, and other relations of each account.

Contact us to learn more about how our solution can assist your company in transforming its compliance.

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