Why Transaction Monitoring is crucial for your business

Transaction Monitoring

Online payments are becoming increasingly popular, especially since most businesses have undergone a digital transformation process. With more people accessing the internet and companies building their online presence, it is no wonder cybercriminals have decided to join the party and use the new technologies to update their fraudulent activities. They spend every waking moment trying to come up with new ways of reaching more targets while staying hidden in the shadows, and the development of online payment systems has opened new doors for them. If companies want to keep up with the fraudulent activities and stop fraudsters before they can cause any damage, transaction monitoring needs to become an essential part of any business dealing with payments.

What is transaction monitoring?

Any business dealing with finances faces the risk of becoming a target of malicious activities like money laundering, human trafficking, terrorist financing, or corruption. In order to prevent this, international organizations have created a set of AML / CTF regulations that businesses need to follow. By staying compliant with AML / CTF or Anti-Money Laundering/Combating the Financing of Terrorism regulations, companies avoid fines and ensure they stay protected from criminals. The last couple of years experienced a dramatic increase in money laundering fines, with $2.2 billion handed out in fines, which is a five times increase compared to the previous year. By following tips on transaction monitoring by SEON, you can help your business to avoid becoming an unsuspecting victim of criminals.

Transaction monitoring allows businesses to spot a suspicious transaction in real-time to assess and prevent different types of financial crime, from money laundering to identity theft. If they have any intention of fighting against cybercriminals and fraudsters, companies need to be able to detect any suspicious activity in real-time and take the necessary steps to prevent it. By monitoring all the transactions and combining the results with customer analysis and their account history, you can determine their risk level and act accordingly. If the transaction monitoring system shows that a transaction is indeed suspicious, you can block it until you get more information.

Why is transaction monitoring crucial for your business?

Any business owner wants to ensure their business is successful, and that starts with managing risks. Sadly, criminals and fraudsters don’t show any signs of stopping their malicious activities. Money laundering scandals, ranging in decades, show how it was always present and will only continue to grow. The only way to stay ahead of them is by taking proactive steps. Transaction monitoring allows businesses to do just that. It enables them to assess risk momentarily and react in real-time, preventing fraudsters and criminals from doing any damage.

Skillcast’s guide on AML and CTF regulations shows that while the main benefit of transaction monitoring is staying compliant with various rules and avoiding fines, it is not the only one. Financial damage is not the only one business can experience if their connection with criminals is revealed. Your customers will not care that it was unintentional; they will just see it as confirmation that your business is unsafe for them and that they can’t trust you. Unlike fines, that you can just pay and be done with them, reputational; damage will have long-term consequences.

The introduction of real-time payments has made life more convenient for businesses, customers, and fraudsters, but in the process, it has complicated transaction monitoring processes. In the past, that was all done manually, making it hard to keep up, but with the implementation of real-time transaction monitoring, companies can finally get one step ahead. This also reduces the risk of the false-positives, especially with businesses that monitor transactions with a rule-based approach. With this approach, a large number of customers were flagged, and their transactions declined since they were considered high risk due to a rule. Sometimes, just visiting a website for a particular location was enough to block a transaction. The risk-based approach considers more information, allowing it to make more informed decisions about the risk level.

In short, transaction monitoring can help you:

* Stay compliant to AML / CTF regulations

* Reduce user friction

* Reduce false positives

* Identify any discrepancies in a customer’s behavior

* Prevent fraudulent activity

* Reduce the cost of manual reviews

* Prevent reputational damage

Implementing transaction monitoring is not only essential to fight against money laundering, human trafficking, terrorist financing, or corruption, but it can also help different elements of business operations.


The world is constantly changing, with new technologies finding their way into our lives. While all of these technologies are meant to make our lives easier and more convenient, unfortunately, they also have a downside of dealing with fraudsters and criminals. This is why it is essential for everyone to start taking their part in ensuring online safety. Transaction monitoring is a step in the right direction. Not only does it protect companies from becoming unintentionally involved in criminal activity, but it can also prevent cybercriminals and fraudsters from endangering your business and its customers.