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What Is Transaction Monitoring and Transaction Screening

Transaction screening involves verifying transaction information to identify potential financial crime risks before approval, focusing on issues like fraud and money laundering. In contrast, transaction monitoring is the ongoing assessment of completed transactions to detect criminal activities, utilizing advanced technology and risk data. Both processes are essential for effective risk management in financial institutions.

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Manav Gupta
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12 views1 page

What Is Transaction Monitoring and Transaction Screening

Transaction screening involves verifying transaction information to identify potential financial crime risks before approval, focusing on issues like fraud and money laundering. In contrast, transaction monitoring is the ongoing assessment of completed transactions to detect criminal activities, utilizing advanced technology and risk data. Both processes are essential for effective risk management in financial institutions.

Uploaded by

Manav Gupta
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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DIFFERENCE BETWEEN TRANSACTION MONITORING AND TRANSACTION SCREENING

Transaction screening- In general, examines the information related to a transaction to make sure it does
not raise suspicious activity for financial crime.

More generally, transaction screening verifies the information attached to a transaction to ensure it does
not present red flags for financial crime, especially:

Fraud

Sanctions evasion

Money laundering

Terrorist financing

Weapons proliferation

Several elements are key to an effective transaction screening program, which should:

Be conducted before a transaction is approved.

Detect sanctioned entities, locations, and activities.

Rely on sanctions lists refreshed soon after regulators update them.

Be well-integrated into a firm’s holistic risk data.

Provide clear risk insights to analysts to enable effective remediation.

Incorporate both internal and third-party risk insights.

The continual practice of monitoring transactions for threats after they are finished and processed is
known as transaction monitoring. Inbound and outbound transactions are monitored for fraud
indicators, money laundering, terrorist financing, sanctions violations, and other criminal behaviors in
keeping with a firm’s risk profile.

Transaction Monitoring - It is critical to effective transaction monitoring to have an accurate and


transparent data collection. An exceptional transaction monitoring technology enables businesses to
consider all transaction warnings in the context of other risk data. When experts can see warnings in the
context of the firm’s wider risk data, they can rectify them more efficiently.

An effective transaction monitoring solution involves several procedures, a few of which are as follows:

Examining previously completed transactions, ideally in real-time.

Detecting financial crime risks through the use of rules, artificial intelligence, or a mix of the two.

Access to additional risk data, such as transaction screening and previous investigations.

Giving analysts clear information and context.

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