Which transaction monitoring processes would alert a bank for red flag activity?

The correct answer is D. A charity account receives multiple electronic transfers and then sends a wire transfer to a higher-. This is a red flag of money laundering or terrorist financing that involves the use of non-profit organizations (NPOs) as conduits for illicit funds. NPOs may be vulnerable to abuse by criminals who exploit their legitimate activities, reputation, and access to funds and…

AML/CFT Compliance Programs

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Options

AA client who does not typically make extravagant credit card purchases books an airline ticket on
BThe company has a name that is similar to that of a company whose directors are named on the
CA client makes a prepayment on their credit card and a week later makes multiple cash
DA charity account receives multiple electronic transfers and then sends a wire transfer to a higher-

How the community answered

(43 responses)

A
14% (6)
B
7% (3)
C
5% (2)
D
74% (32)

Explanation

This is a red flag of money laundering or terrorist financing that involves the use of non-profit organizations (NPOs) as conduits for illicit funds. NPOs may be vulnerable to abuse by criminals who exploit their legitimate activities, reputation, and access to funds and resources. A transaction monitoring process that would alert a bank for this red flag activity is to analyze the source, destination, frequency, and purpose of the funds transferred to and from the charity account, and to compare them with the expected profile and activity of the NPO. If the bank detects any inconsistency, discrepancy, or deviation from the norm, it should raise an alert and conduct further investigation.

Topics

#transaction monitoring#red flags#suspicious activity#wire transfers

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