FRM Part II · FRM Exam Part II · Sound Management of Risks Related to Money Laundering and Financing of Terrorism
A long-standing retail customer with a profile of salaried income and monthly inflows of about 4,000 suddenly receives several cash deposits just under the reporting threshold, followed by immediate wire transfers abroad. What is the most appropriate response under an effective ongoing monitoring framework?
The alerts should be escalated and investigated against the customer's known profile, with a suspicious transaction report filed if suspicion remains. A clean history does not justify ignoring the pattern, and closing the account or deleting the alert without proper review fails monitoring and reporting duties.
- AClose the account immediately without any further review or reporting
- BTake no action because the customer has a long clean history
- CEscalate the alerts for investigation against the customer profile, and file a suspicious transaction report if suspicion remainsCorrect
- DAsk the customer to explain by phone and delete the alert if they sound plausible
Explanation
Ongoing monitoring compares activity with the known customer profile. The structuring-like pattern is inconsistent with that profile, so it should be investigated and reported to the financial intelligence unit if suspicion persists. A clean history does not excuse it, closing without review may miss reporting duties, and deleting alerts based on a phone call undermines the audit trail.
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