What a monitoring rule does
A transaction monitoring rule selects activity for review when stated conditions are met. A threshold is a value used in those conditions.
A business might examine changes in payment frequency or transaction size. The setting should reflect its services, customers and assessed risks.
The result is an alert that needs assessment. It is not a legal finding or an automatic suspicious matter report.
Describe the rule before using it
A useful rule record states the risk, data, conditions and review action. It also names the owner of the setting.
For a frequency rule, the record could identify the customer grouping, time period and transactions counted. Missing records can prevent detection.
Staff need a route to report unusual behaviour that a numerical rule cannot capture. The monitoring process can use manual and automated methods.
Source: AUSTRAC: How to monitor your customers; Monitoring customers based on risk.
Keep detection and reporting thresholds separate
A business chooses monitoring settings to address its risks. The cash threshold for a threshold transaction report comes from the reporting law.
Changing a software setting cannot change that legal threshold. A small transaction can still support a suspicion when considered with other facts.
The TTR article describes physical currency, the reporting amount and separate payments. The SMR article owns the suspicion test.
Sources: AUSTRAC: How to monitor your customers; AUSTRAC: When to submit; Multiple physical currency transactions; Federal Register of Legislation: Sections 41 and 43.
- Monitoring rule
Selects activity for review using stated conditions.
- Monitoring threshold
A value within a business’s detection rule.
- Reporting threshold
A requirement from reporting law that software settings cannot change.
Monitoring settings and legal thresholds
An alert needs assessment. A small transaction can still raise a suspicion, and changing a rule does not change reporting law.
Separate evidence questions. An answer to one does not settle the others.
Test a frequency rule
A fictional remittance business finds that its rule misses payments recorded under separate customer references. It examines whether the references concern the same customer.
The team corrects the supported identity links and tests the rule on known cases. It also tests ordinary activity for unnecessary alerts.
It records the setting, reason, results and approval. Reducing the alert count alone does not show that detection improved.
Later changes to services or data can require another review. The business keeps evidence of the rule that was in use at the time.
Source: AUSTRAC: How to monitor your customers; Record keeping.