Transaction Monitoring Top Interview Questions
Last Updated on Dec 18 , 2023, 2k Views
Share
Transaction Monitoring
1.What is Transaction Monitoring?
Transaction Monitoring is a process of reviewing the transactions of the customer to identify if there are any suspicious transactions and recommend SAR (Suspicious Activity Report) {Tool used in Transaction Monitoring by most banks is Actimize)
2.What is SAR/ STR/ SMR?
SAR (Suspicious Activity Report) or STR (Suspicious Transaction Report) or SMR (Suspicious Matter Report) is a tool used by financial institutions to file suspicious activity to the FIU (Financial Intelligence Unit).
3, Tell me about a few thresholds?
- Rapid Movement of Funds/ Wash Transactions
- Structuring of funds
- Large Incoming of funds
- Large Outgoing of funds
- Negative Keyword
- Burst in customer activity
- Round dollar amounts
4.Tell me about Rapid movement of funds?
Rapid movement of funds is quick incoming and outgoing of funds within a week’s time, also known as wash transactions.
5. Tell me about Structuring of funds.
Structuring of funds are transactions which fall below the reporting threshold, for example in the US, transactions below 10000 USD fall under the structuring pattern.
*Structuring is a process of breaking a large amount of funds in smaller transactions below the reporting requirement to avoid regulatory reporting.
6. Tell me a scenario where you had identified a potential Suspicious activity?
There was a case that was closed by the operations team based on complimentary line of business, but when it came for QA review, I was able to identify through open search that the focal entity had a subsidiary in Iran, which is a Sanctioned country, and hence we reopened the alert and escalated to Level 2 team, and later during the onsite calibration call, it was informed that a SAR has been raised on the FE, and I received an appreciation from the US stakeholder.
7. Who is the India, US and UK financial regulator?
- RBI – Reserve Bank of India
- OCC – Office of the Comptroller of Currency for US
- FCA – Financial Conduct Authority for UK
8. What is BSA Act?
BSA Act also known as Bank Secrecy Act of 1970 states that financial institutions should record and report financial transactions. BSA Act has five pillars, which every financial institution should implement – 1) Development of internal policies and procedures; 2) Appointment of designate compliance officer; 3) Employee ongoing training program; 4) An independent Audit review; 5) Customer Due Diligence
9. What is the full-form USA Patriot Act?
- USA Patriot Act of 2001 also referred as “United and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism”.
-Section 313 – refers to prohibition of doing business with shell banks.
-Section 314 (a) – refers to sharing information with law enforcement and regulators. 314 (b) – refers to sharing information with other financial institutions.