Standards for automated AML

Automated transaction monitoring (TM) systems based on profiling and/or rules around customer activity are widely used by larger firms to counter money laundering. The FSA issued a statement of good practice on the topic in July. It says that institutions should understand clearly the capabilities of TM software and data constraints, such as cleanliness. The ability of the vendor to support the system on an ongoing basis and the risk that it may be not be compatible with other standard software upgrades should be considered. The FSA also warns firms not to rely on the TM programme as a substitute for manual reporting.