Transaction profiling: Knowledge is power

Christiaan DappersAML (Anti-Money Laundering)

Transaction profiles, KYC, transaction monitoring – these are all highly recognisable terms that have been under a lot of discussion over the last few years. The fight against money laundering and terrorist financing has given rise to new guidance and expectations from the regulator.

Proper KYC processes and the creation of strong transaction profiles are vital to proactive transaction monitoring – putting you a step ahead and allowing quick resolution of potential breaches.

But at its core, transaction profiling is really about understanding who your clients are via their financial habits and behaviours. Something which offers much more value than merely ticking a box for compliance.

Transaction profiling: just another bit of admin or an important financial tool?

Increased regulation has certainly meant a parallel increase in administration and closer monitoring, something which might give a sense of greater complexity and a slow-down in actually getting business done. We don’t think that needs to be the case at all. And in fact, we see many commercial advantages resulting from tightening regulation.

But to keep it balanced, let’s look first at the downside of what is essentially knowing your clients better.

Oh wait, there isn’t one. Moving on then, let’s look at the benefits of transaction profiling.

Simply put, a transaction profile is just an easy way of knowing how much money is going where, when and to whom. By setting parameters around transaction amounts, frequency and counterparties, identifying anomalies becomes a cinch. The minute there’s a potential issue you know about it. From there it can be resolved or escalated, everybody’s happy.

And those commercial advantages we promised?

In a word: data. By setting up detailed profiles and monitoring the transaction flow from those profiles you have an opportunity to generate data that can be used to build up a picture of both individual clients and that of your whole client base. That means you can offer additional products and services in a more targeted way, giving a much better chance of increasing revenue.

After all, a change in transaction behaviour may not always point to wrong-doing, but could be an opportunity to broaden the scope of your relationship. Understanding your clients also provides for a more personalised customers service experience, and a happy client is one who stays, meaning you can forge stronger, more profitable and more sustainable relationships.

Commercial advantages of a transaction profileThe trick is to use a transaction profiling tool that allows you to not only gather enough information at the outset, but to turn the data generated into clear and useful insights via the use of dashboards and reporting. And it goes without saying that this tool should tick every box for ensuring complete compliance with AML regulations.

It’s simple really (really!)

Get to know your client through good transaction profiling and you unlock insights and opportunities, while easily taking care of all that boring* compliance stuff. It’s a no-brainer.

Want to see how easy it can be? Get in touch, we’d love to show you!

 

Christiaan Dappers

Christiaan Dappers

Managing Director at ComplianceWise
ComplianceWise is a compliance process consultancy company. We assist financial institutions with the help of our online compliance solution.

ComplianceWise offers you quality and completeness of your KYC and a highly efficient compliance process. With our extensive experience in compliance and business process management, we are the perfect partner to assist you in optimising your compliance process.
Christiaan Dappers