Table of Contents
Transaction Monitoring Highlights
- Meaning: A risk based program to help employees identify suspicious behaviours and transactions, and protect the business and customers.
- Why it matters: It supports suspicious matter reporting and helps meet ongoing and enhanced customer due diligence obligations.
- Where it sits: You must document how you monitor customer transactions in Part A of your AML and CTF program.
What Transaction Monitoring Means
AUSTRAC states your business must have an appropriate risk based transaction monitoring program, and it must be documented in Part A of your AML and CTF program.
Practical Examples for Tranche 2
- Monitoring whether deposits and settlement funds match the expected customer profile and stated purpose.
- Flagging repeated changes in payers or beneficiaries during a matter.
- Identifying patterns consistent with structuring where payments appear deliberately split.
Best Practices for Transaction Monitoring
- Define what you monitor. AUSTRAC expects processes to identify suspicious customer transactions, based on your risk assessment.
- Keep it workable for professional services. Monitoring can be case based and matter based, not only account based, but it still needs clear triggers and documentation.
- Link monitoring outcomes to escalation and SMR decision making.
Common Challenges
- Firms assume they do not have transactions because they do not run accounts, then overlook trust accounts, third party payments, and settlement flows.
- Inconsistent monitoring across partners and offices.
- No evidence trail showing what was reviewed and why it was cleared.
Why Transaction Monitoring Matters
Transaction monitoring is where a program becomes real. It is how you spot behaviour that does not match the client story, and it is often what triggers a defensible SMR.
“Bookmakers sit at a natural convergence point for cash, speed and anonymity. AUSTRAC’s focus reflects the reality that wagering platforms can be misused as value transfer mechanisms if risk controls are not actively applied.”
FAQs about Transaction Monitoring
Do we need software?
Not always. The expectation is appropriateness and risk basis. Smaller firms can implement practical manual controls, but they must be consistent and evidenced.
