Transaction monitoring system (TMS)
Definition
An automated system that screens transaction data against a library of typologies and thresholds to generate alerts for potential money laundering. A key component of an AML programme. The system must be calibrated to the institution's risk profile, and every alert must be reviewed and documented by a qualified analyst.
Related terms
- Beneficial ownership
- The natural person(s) who ultimately own or control a legal entity or arrangement, or on whose behalf a transaction is conducted. FATF...
- Customer due diligence (CDD)
- The process of identifying and verifying the identity of a customer and their beneficial owner, understanding the purpose of the business relationship,...
- FATF Recommendations
- The 40 international standards issued by the Financial Action Task Force that set out the measures countries should implement to prevent money...
- Mutual Evaluation Report (MER)
- An assessment of a country's compliance with the FATF Recommendations, conducted by FATF-style regional bodies or by FATF itself. Published publicly. Identifies...
- Suspicious activity report (SAR)
- A disclosure filed with the financial intelligence unit when a reporting entity knows, suspects, or has reasonable grounds to suspect that a...
Explained in
- AML Compliance Audits and FATF StandardsAn automated system that screens transaction data against a library of typologies and thresholds to generate alerts for potential money laundering. A key compo...