Ongoing monitoring definition and meaning | AML glossary
Ongoing monitoring definition: What it means in AML compliance.
Ongoing monitoring in Anti-Money Laundering (AML) compliance refers to the continuous process of assessing, reviewing, and tracking customer transactions and behaviour to detect any suspicious activity that could indicate money laundering or terrorist financing. It is a key component in an organisation’s broader AML framework, designed to ensure that financial institutions and regulated businesses are consistently meeting regulatory obligations, even after the initial customer onboarding and risk assessment have been completed.
Ongoing monitoring isn’t just a one-off check. It’s an active process that extends over the lifetime of the relationship with a customer. This means continuously evaluating risk profiles, reviewing any updates to customer information, and staying vigilant for changes in patterns that may suggest illicit activity. It involves reviewing both high-value customers as well as low-risk ones, with a specific focus on looking for red flags such as sudden spikes in activity, complex structures in transactions, or inconsistencies with the customer’s known behaviour.
The primary goal of ongoing monitoring is to catch anything that might fall through the cracks in initial customer assessments, especially as customer profiles evolve or as new data emerges. This process is dynamic, helping businesses remain compliant with AML regulations while minimising the risk of inadvertently facilitating money laundering activities. Ongoing monitoring also allows businesses to update customer risk profiles based on any changes and external developments, helping ensure that all necessary checks are conducted at the right time.
What does ongoing monitoring mean for AML compliance teams?
For an AML compliance manager in a UK-regulated business, ongoing monitoring is critical for maintaining compliance and minimising the risk of financial crime.
The Financial Conduct Authority (FCA) and other regulatory bodies have clear expectations for businesses to not only perform thorough due diligence when onboarding customers but also to maintain that vigilance throughout the course of the business relationship. Failing to do so could expose your business to significant penalties, regulatory scrutiny, and reputational damage.
Ongoing monitoring also helps your business avoid missing important changes in a customer’s risk profile. Risk is not static, customers’ circumstances can change over time, whether due to changes in their financial behaviour, geopolitical developments, or their involvement in high-risk industries. Keeping an eye on these changes helps you reassess whether the customer’s risk level has shifted and whether any further actions, such as Enhanced Due Diligence (EDD), are required.
On a practical level, ongoing monitoring helps you identify suspicious activities like structuring (splitting large transactions into smaller ones to avoid reporting), rapid transfers to high-risk jurisdictions, or unusual patterns of activity that don’t align with a customer’s known business model. By catching these activities early, you can respond quickly, file Suspicious Activity Reports (SARs) when necessary, and prevent your business from being inadvertently linked to financial crime.
Regulators expect you to have systems and processes in place to ensure ongoing monitoring is not just a reactive measure, but also a proactive one. This means reviewing and refining your monitoring processes regularly to stay ahead of evolving threats and regulatory requirements.
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