Three key steps for validating your transaction monitoring model

June, 2020

Financial Institutions (“FIs”) are increasingly faced with pressure from regulatory authorities to prevent, detect and deter those who wish to use the global financial system for financial crime (“FC”). As criminal behaviour evolves, products become more complex and the regulatory environment develops, FIs look to use quantitative models that can help protect their organisation against these threats.

The challenge though, lies in being able to employ a robust qualitative and quantitative method when designing your Transaction Monitoring (“TM”) capability so that concepts of model validation can be applied to ensure your risk is identified and managed correctly.

There are three key steps that you should follow to validate your TM model:

Did you find this useful?