Transaction Monitoring and Transaction Screening
The two terms are often used as if they mean the same thing. They are separate controls that ask different questions, and a bank needs both working together.
Raymond Cheong — Advisor
1 min read
Transaction monitoring looks at how a customer behaves over time. It uses what the bank knows about the customer, such as their profile, the products they hold and the activity expected of them, and flags patterns that look out of character. Depending on how it is set up, it can work in real time, near real time or after transactions have posted.
Transaction screening checks the details of a payment against restricted data. Names, account and wallet identifiers, payment fields and locations are compared with sanctions lists, embargoes and designated addresses. Screening usually happens before or during processing, and any potential match has to be reviewed before a decision is made to clear, hold, block or escalate the payment.
The paper compares the two controls on purpose, method, timing and output, and explains why the bank should keep a clear record of how each alert was dealt with. It also covers digital assets, where blockchain analytics can support both controls. A payment to a sanctioned wallet would be picked up by screening. Funds split across several unlisted wallets to stay under reporting thresholds would need monitoring to spot them.
Written by Raymond Cheong and Hubert W. E. Knapp. Published in cooperation with AML & Digital Finance Review.
QNTM Insights Transaction Monitoring vs Screening
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