Regulatory Requirements

Financial Institutions must have an effective and appropriate transaction monitoring process embedded within their operational framework in order to meet current regulatory requirements. The transaction monitoring framework should be designed to work with perceived risks relating to the firm’s business, products & services as well as its client base as well as known risks.

Firms must ensure that the escalation and reporting of suspicious activity and transactions is well designed and documented in order to ensure effective reporting to the National Crime Agency.

From time-to-time financial institutions identify deficiencies within their automated transaction monitoring program which results in the need to review and assess the framework to ensure it meets currently regulatory requirements, including remediation of historic transactions.

FCA Guidance

The FCA handbook states:

A firm must ensure the policies and procedures established under SYSC 6.1.1 R include systems and controls that:

  1. Enable it to identify, assess, monitor and manage money laundering risk; and
  2. Are comprehensive and proportionate to the nature, scale and complexity of its activities.

Industry Best Practise

An effective AML transaction monitoring framework should consist of an automated rules-based alert system combined with a manual review and assessment which is aligned to the nature, scale, complexity and risk appetite of a firm. A well-designed and robust AML transaction monitoring process model also needs to take into account the anticipated activity of each client and have these parameters built into the process. An effective escalation and reporting process is also critical to ensure compliance to regulatory requirements.

General industry best practise is to review the AML transaction monitoring process, along with all policies and procedures on an annual basis or when a firm’s risk appetite has changed, along with changes to regulatory requirements.

Lysis AML Transaction Monitoring remediation Service

Lysis works with firms in the wholesale financial market to review and enhance AML Transaction Monitoring processes and controls, as well as providing a remediation service to review historic transactions in order to identify and report potential cases of money laundering and other criminal activity.

Lysis undertakes a 5 points plan to review and enhance the AML transaction monitoring process. This approach can be tailored to individual requirements.

Review & assessment of Current AML Transaction Monitoring Process

In order to assess the effectiveness of an AML transaction monitoring program, Lysis initially reviews the current process as well as the policy and procedures relating to the function. Once this initial review is complete, Lysis works closes with the business and compliance function in order understand the detail of the business it undertakes, as well understanding the risk appetite of the firm from a compliance perspective.

A sample review of historic transactions and escalations would also be undertaking to ensure the correct level of diligence was applied.

Gap Analysis

Once the AML transaction monitoring process has been reviewed, Lysis undertakes a detailed gap analysis of the current process, including policy, procedure and the IT infrastructure used versus current regulatory requirements, industry best practise and the nature of business undertaken by the firm.

The gap analysis is then reviewed and discussed with the MLRO and other stakeholders, and would form the foundations for the enhancement of the current AML transaction monitoring process.

Enhancement of AML Policy & Procedures

Based on the research carried by Lysis, the AML Transaction Monitoring process would be enhanced to current regulatory standards whilst still being tailored to the individual requirements of the client. The tailored and enhanced process would work in conjunction with the firms business and risk appetite by documenting processes and controls which would appropriate to the size and nature of the firm’s business, as well as reflecting current regulatory requirements and industry best practise.

An effective and controlled escalation and reporting process would be embedded within the process.


In conjunction with Lysis Academy, Lysis can provide customised and accredited training would be given to all staff detailing their general responsibilities regarding money laundering and terrorist financing as well as in depth training on the new AML Transaction Monitoring process.

This training will help with:

  • Identifying Red Flags.
  • Understanding the basis of the suspicion
  • Being able to complete proper analysis
  • Developing operational and strategic controls within the business.


Lysis can rapidly deploy a team of transaction monitoring specialists and senior regulatory consultants to review client accounts and transaction in order to identify suspicious transaction and cases of money laundering and/or terrorist funding. Lysis’s consultants have between 5 and 15 years of experience working within AML.

Working closely with the client, Lysis will identify and report areas of concern relating to AML transaction monitoring to the bank’s senior management team, outlining any key areas of concern related to anti-money laundering. Prior to completion of any project, Lysis will present findings, conclusions and any further recommendations to the client.

The general methodology of the remediation process Lysis undertakes includes:

  • Use of review templates to keep process standard.
  • Review of existing on-boarding and transaction records.
  • Outreach to relationship managers as needed.
  • QA of initial cases by MLRO to ensure quality expectations being met
  • Reporting detailing findings of the review as well as a road map advising on next steps.

Why Lysis

Lysis Financial is an operational change management consultancy in the wholesale financial markets with a specialism in governance, risk and compliance. As a firm we are focussed on delivering pragmatic, cost-effective solutions to our customers and our preferred modus operandi is to roll our sleeves up and work with our clients to make things happen.

Our consultants typically have 3-15 years’ experience and our senior staff 20+ years’ experience in the wholesale financial markets. Lysis can work with institutions to develop a tailored robust and effective screening and monitoring program at a competitive cost.