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What is transaction monitoring

Transaction monitoring (Or TM) is a critical component of combating money laundering and terrorist financing. In addition to helping entities and businesses identify unusual or suspicious activity, a transaction monitoring system aids regulators and law enforcement agencies in tracking criminals.  An effective transaction monitoring system provides the following benefits:  

  • Get customized fraud intelligence on payments and transfers.  
  • Improve the quality of data and architecture   
  • Lessen costs with automated hazard scoring  
  • Keeping up to date with full audit trail
  • Easy knowledge sharing  


It goes without saying that without an optimized transaction monitoring system, AML procedures would be of much use. Surveillance and monitoring employ a number of procedures designed for transaction screening, to quickly and diligently identify risks like financial crimes.  

Transaction monitoring solutions enable entities like Centralex to monitor their customers' transactions in real-time as well as on a daily basis. These solutions not only look at current transactions but also analyze a customer’s historical information and account profile. By making use of this data, a thorough customer analysis can be conducted in order to understand the level of risk posed by a customers' activity, while also predicting future activities and behaviours. 

Transaction monitoring is critical to the AML procedures of a financial institution because it can detect suspicious activities such as large transactions. As a result, transaction monitoring can enable organizations to detect financial crimes before they occur or at an early stage. Sanctions screening and customer profiling capabilities can be included in AML transaction monitoring software. 

Why is Transaction monitoring so important? 

Recognizing a suspicious transaction could save thousands or millions of dollars from being laundered by criminals.  

Cryptocurrency has a reputation for anonymity. For example, the ID of a wallet is a meaningless string of characters. Because of this anonymity, criminals are encouraged to use Bitcoin and other coins for fraudulent purposes in the hope that their crimes will not be discovered. 

Through the advanced capabilities of real-time and back tracing transaction monitoring software the general public will be able see cryptocurrencies in a new light and dispel media myths about cryptocurrencies being almost entirely used for criminal purposes. 

Also see: What is AML  

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