What is transaction monitoring?

Short answer

Transaction monitoring is the continuous review of customer transactions to spot activity that may indicate money laundering, terror financing or fraud. Examples are structuring, rapid pass-through or activity out of line with the customer's profile. Alerts are investigated, and confirmed suspicions are reported to FIU-IND as Suspicious Transaction Reports (STRs) under the PMLA.

Hindi mein samjhiye

Transaction monitoring mein bank lagatar customer ke lein-den par nazar rakhta hai, taaki money laundering ya fraud pakda ja sake. Shaq hone par jaanch hoti hai, aur zarurat ho to FIU-IND ko STR report bheji jaati hai.

Rules vs models

Traditional systems use fixed scenarios, such as 'cash deposits just under a threshold' or 'credits over X in Y days'. They are easy to explain but noisy: most alerts are false positives. Model-based monitoring scores behaviour against a customer's own baseline and their network. It cuts noise and catches new patterns like mule accounts. Regulators still expect every alert to be explainable.

Transaction monitoring vs screening

Screening checks a party or payment against sanctions and watch lists, usually before it happens. Monitoring looks at behaviour over time, usually after. A compliant AML program needs both, plus KYC risk rating.

Real-time matters for UPI

With UPI and IMPS, money is gone in seconds, so batch monitoring the next day is too late for fraud. Real-time risk scoring at the moment of payment lets a bank hold or step-up authenticate a risky transfer. See ZyroAI Sentinel.

Common questions