The Importance of a Strong AML Transaction Monitoring Governance Framework in Today’s Regulatory Environment

Expectations for transaction monitoring (TM) governance are quickly evolving due to the complexity of detection systems, the demand for additional operational oversight, increased regulatory scrutiny, and the need for an adequate control framework to guarantee proper risk management. As a result, compliance officers/AML officers/money laundering reporting officers (collectively, MLROs), along with other affected financial institution personnel, are finding it increasingly difficult to manage their existing responsibilities amid the heightened scrutiny and expectations regulators have regarding transaction monitoring systems and the end-to-end (E2E) processes tied to them (e.g., vendor selection, tuning rationale, model validation requirements, backlogs, etc.).