Importance of Simulation in AML Transaction Monitoring

Blog / Importance of Simulation in AML Transaction Monitoring

How terrible does it sound to control all these transactions these days, when millions of transactions are processed in a day? But of course, technology has an answer to this as well; it is aml transaction monitoring solution to prevent financial crimes.

Financial Institutions can control billions of transactions instantly and efficiently by automating the transaction monitoring process flow. The AML Transaction Monitoring process is a legal requirement, especially for financial businesses. Companies create a rule system for transaction tracking systems based on Anti Money Laundering, Counter Financing Of Terrorism, and Know Your Customer requirements. If anything triggers these rules during customer transactions, the transaction monitoring software generates an alarm.

When the software generates an alarm, the process is automatically stopped, and the process is examined in detail by the Compliance or Risk Department of the companies. If a customer's suspicious transaction is detected, it will notify the CFT and KYC regulators. This report is called the Suspicious Activity Report (SAR). 

With the AML Transaction Monitoring tool, organizations can create their own scenarios and rules without any coding knowledge to detect high-risk transactions automatically. So why are methods and simulation important in the AML Transaction Monitoring tool? If you are wondering about the answer to the question, keep reading.

AML Transaction Simulator

Transaction simulation is important in AML Transaction Monitoring. Monitoring, analyzing, and simulating every click and scroll in financial transactions can help you optimize your company strategy and discover steps that do not work as intended in the transaction process without negatively affecting your own users. You can run simultaneous simulations and test and verify legal changes to your data. 

You can fine-tune your rules with AML Simulation. If you throw your rules to life without simulating, this fine-tune may not work properly. For example, I leave an inappropriate simulation example below, where all transactions appear to be high levels, but not all of them are high levels. Because of the strict rules you set, the transactions that are not really high levels may appear to be high levels. Lose and workload. For this reason, simulating your rules before going live reduces your error and prevents you from wasting time with these wrong errors. Therefore, simulation is critical.

AML Transaction Simulator

Sanction Scanner Transaction Simulator

As Sanction Scanner, we support financial institutions' financial struggle to the end, producing solutions for this. You can perform Transaction Simulation in the AML Transaction Monitoring tool, one of the solutions we produce. You can do this with the filters included in the Transaction Simulator. You can select the selection you want in Rule Set Selection (New Customer or EFT Control) in the filters, and you can apply the filters and perform a simulation by filling the options such as Alert Level, Entry Date, Transaction Status, Transaction Source, Transaction Direction, Transaction Channel in Transaction Selection.

AML Scenario and Dynamic Rules

With the AML Transaction Monitoring tool, you can define your own rules and scenarios without coding. Scenarios can run concurrent simulations and test and validate regulatory changes on your data. You may need to change the scenarios you have prepared periodically because Anti-Money Laundering policies and regulations are dynamic; you should change business rules based on these continuous changes and test their effects with your resources before implementing them.

Besides, to learn more about a scenario, do an in-depth look at certain operations, such as associating transactions with your KYC data, determining per transaction risk score and triggering rules, and tracking all activities performed in transactions using audit history logs, etc. The realistic scenarios you have prepared are not affected by the customer's privacy and the results of the scenarios by policies or legal problems. The management and administration of scenarios is a key indicator for understanding the performance of crimes.

Dynamic rule testing is an area where vendors apply advanced analytics and machine learning to optimize fine-tuning and segmentation. For larger organizations with advanced model risk management operations, the ability to document adjustments and results is an important consideration.

As a result, developing an effective process monitoring system is a multi-step procedure involving many critical business decisions. One of the most important things financial institutions should know and constantly remember when dealing with financial crime is the existence of ever-evolving regulatory environments. Regulatory standards should be frequently reviewed and integrated into scenarios.

Sanction Scanner Transaction Screening

The Sanction Scanner offers options for dynamically writing rules on a wide scale, from the best-known scenarios to customized scenarios. You can create the most appropriate rules and scenarios for your business without having to write code. False-positive alarms are reduced with the scenarios you make for your business. As a result, you can focus on the right alarms and reduce your control workload accordingly.

You can apply scenarios with filters such as Date Range, Alert Level (very low, low, medium, high, critical), and Rule Set (new customer, EFT Control) in the Sanction Scanner AML Transaction Tool. Finally, Test your changes to your rules or new rules with your existing Transactions and see their impact on the Live environment before going live.

AML Transaction Screening


AML Transaction Monitoring is important for financial institutions, but it can be a bit complicated. Anti-Money Laundering solutions and regulations are quite complex. Don't worry if you don't understand the scenarios and simulation in the AML Transaction Monitoring tool. Request a demo, and our expert team will show you our AML solutions and how they work. Also, do not hesitate to contact us if you have any questions.

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