Current transaction monitoring software incorporates rules designed to flag activity based on certain risk factors, such as shifts in frequency or amount of transactions through your clients, even if the activity itself seems lawful.
For example, a sudden spike in small marketplace transfers to a bank account might be harmless, but it might signify something much more troubling and worth a second look. Identifying these illegal transactions in cases like these requires looking at where the money is going, rather than where the funding is coming from. Also, worth seeing is who else would have paid into that account and who else was linked towards that account. Effectively doing something like that means banks can track money throughout the network.
To do this well, financial institutions need to develop a detailed consumer risk profile that includes large-quality data about the person and their spending patterns, as well as about associates and close partners. Closely monitoring for shifts in the risk status of these clients is key. Fighting terrorism involves concentrating on individual accounts, and not just the transaction size.
Yet Banks and regulated financial institutions should have access to the right data to do that. If the secondary data is not retrieved in the correct way the entire process is concerned with addressing false positives and playing catch-up with an endless flow of warnings. Technologically advanced devices, available on the market, should not only screen but combine both internal and external data sources. Such instruments link financial and non-financial details, identify patterns and detect anomalies.
Adverse information and media tools search millions of online news sources to discover information that could affect the risk profile of that client, including participation in illegal or criminal activity.
The answer is within easy reach. Even as the terrorist profile changes and terrorists find new ways to manipulate the financial system to finance their assaults, the tools are available to combat them. Banks and financial institutions must face the threat. It is only by incorporating the right software with the right information that financial institutions will be able to disrupt terror financing, even if the funding source is large or small.