A transaction monitoring system (TMS) is a tool that helps financial institutions detect and report suspicious activities related to money laundering, terrorist financing, and other financial crimes. A TMS needs to be implemented carefully and effectively to ensure its accuracy, reliability, and compliance with regulatory requirements.
One of the best practices for implementing a TMS is to perform systems integration testing (SIT) at key steps of development and user acceptance testing (UAT) prior to going live with the TMS. SIT is a process of verifying that the TMS can interact with other systems and data sources correctly and efficiently. UAT is a process of validating that the TMS meets the functional and operational expectations of the end-users and stakeholders.
By conducting SIT and UAT, the financial institution can identify and resolve any issues or defects in the TMS before it is deployed in the production environment. This can help avoid potential problems such as data quality issues, false positives, false negatives, system errors, performance issues, and regulatory breaches.
Performing SIT and UAT can also help ensure that the TMS is aligned with the financial institution's risk assessment, policies, procedures, and controls.
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Step 1 - Transaction Monitoring Implementation Best Practices
Anti-money laundering transaction monitoring system implementation considerations ACAMS CAMS Certification Study Guide 6th Edition