bankingciooutlook

AML Analytics Introduces Red Flag Tests to Health Check Transaction Monitoring Systems

Banking CIO Outlook | Tuesday, May 04, 2021

Justin Holder, CEO

Red Flag Tests is AML Analytics' newest approach, and its groundbreaking ability to discover inefficiencies in a transaction management framework is expected to drive rapid global adoption.

FREMONT, CA: AML Analytics has announced the introduction of Red Flag Tests as part of its expansion of anti-money laundering (AML) solutions for transaction monitoring systems.

Red Flag Tests are developed by AML Analytics' expert Regtech and Suptech developers as part of their portfolio of solutions to assist financial institutions (FIs) in the controlled market. Red Flag Tests, which use simulated data to verify transaction monitoring system guidelines, can assist analysts in determining if a system is functioning properly to reduce financial crime risks. This AML Analytics approach simplifies the job of analysts by categorizing complex rules into Smart Scenarios.

Red Flag Tests is AML Analytics' latest solution, and its groundbreaking ability to discover inefficiencies in a transaction management framework is expected to drive rapid global adoption. Red Flag Tests employs millions of synthetic transactions to detect flaws in a transaction monitoring system's alerting capabilities, allowing analysts to remove time-wasting inaccuracies and improve the system's performance.

"Red Flag Tests plays an essential part in the AML compliance programmes of financial institutions as a vital means of mitigating financial crime risks. It brings reassurance that a transaction monitoring system is working correctly, meaning that the system is able to identify and capture suspicious or unusual transactions." said Justin Holder, CEO and Founder.

A Red Flag is a regulatory-based indicator that highlights potential illegal activity in a bank account.

Expert analysis of illegal transactional behavior is used to generate red flags. They are classified in accordance with regulatory guidelines and are intended to classify particular financial crime typologies such as the Illegal Wildlife Trade, Modern Slavery, and Terrorist Financing. A faulty transaction monitoring system will not identify suspicious or irregular transactions that are consistent with known money laundering and terrorist funding typologies. This puts the FI at serious risk of sanction violations and fines.

"We help our clients ensure that their sanction screening and transaction monitoring technologies are working in the manner they expect and that they are fit for purpose," added Justin Holder.

AML Analytics has been selected as one of the Top 5 Regtech Solution Providers in UK by the Banking CIO Outlook magazine for the year 2020.

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