Transaction monitoring rules

Transaction monitoring rules are crucial in detecting suspicious activities and

potential instances of fraud within financial institutions. Here are some sample
transaction monitoring rules commonly used in the industry:

1. Unusual Transaction Amount:

 Rule: Flag transactions that deviate significantly from the customer's typical
transaction amount.
 Example: If a customer usually makes transactions around $50-$100 but
suddenly conducts a transaction of $10,000, it could be flagged for further
investigation.
2. Out-of-Pattern Transactions:
 Rule: Identify transactions that fall outside the usual pattern of behavior for a
customer.
 Example: If a customer typically makes purchases within their home country
but suddenly starts making large transactions overseas, it could raise
suspicion.
3. Frequency of Transactions:
 Rule: Monitor the frequency of transactions to detect sudden spikes or
unusual activity.
 Example: Flag an account if it makes more than five transactions in a day,
especially if it's unusual for that account.
4. High-Risk Countries:
 Rule: Identify transactions involving countries known for money laundering or
terrorist financing.
 Example: Flag transactions involving countries on a high-risk list, such as those
with weak anti-money laundering regulations.
5. Round Dollar Amounts:
 Rule: Flag transactions that involve round dollar amounts, as these are often
associated with money laundering.
 Example: If a transaction is for exactly $10,000, it may be flagged for further
investigation due to the common practice of structuring transactions to avoid
reporting requirements.
6. Multiple Transactions Below Reporting Threshold:
 Rule: Monitor accounts making multiple transactions just below the threshold
that triggers reporting requirements.
 Example: If a customer consistently makes transactions of $9,000, just below
the $10,000 reporting threshold, it may indicate structuring to avoid detection.
7. Large Cash Deposits or Withdrawals:
 Rule: Flag accounts with unusually large cash deposits or withdrawals.
 Example: If a customer who typically conducts small transactions suddenly
deposits $50,000 in cash, it could be flagged for investigation.
8. Sequential Transactions:
 Rule: Identify transactions that occur in sequence or with patterns that mimic
testing of stolen credentials.
 Example: If multiple transactions occur within a short timeframe, each
attempting to use different card numbers, it could indicate a fraudster testing
stolen credit card information.
9. Uncharacteristic Transaction Channels:
 Rule: Flag transactions conducted through channels that the customer doesn't
typically use.
 Example: If a customer primarily uses online banking but suddenly makes a
transaction at an ATM in a different state, it could indicate unauthorized
access to the account.
10. Spike in Account Balance:
 Rule: Monitor for sudden increases in account balance that are inconsistent
with the customer's profile.
 Example: If an account with a history of low balances suddenly receives a large
deposit, it could indicate fraudulent activity.

Rule1: Unusual Transaction Amount

Objective: The objective of this rule is to identify transactions that deviate

significantly from a customer's typical transaction amount. It aims to detect
anomalies that could indicate fraudulent activity, such as unauthorized use of an
account or money laundering.

Methodology: To implement this rule effectively, financial institutions typically

follow these steps:

1. Customer Profiling:
 Establish a baseline of normal transaction behavior for each customer. This
involves analyzing historical transaction data to determine the typical
transaction amounts for each account holder.
 Factors such as the customer's income level, spending habits, account type,
and transaction history are taken into consideration.
2. Threshold Setting:
 Set thresholds or ranges for what constitutes "usual" transaction amounts for
each customer.
 These thresholds can be based on statistical analysis, such as mean or median
transaction amounts, or they can be predefined based on the institution's risk
tolerance and regulatory requirements.
3. Real-Time Monitoring:
 Monitor transactions in real-time as they occur, comparing each transaction
amount against the customer's established profile and thresholds.
  Any transaction that falls outside the predetermined range or exceeds a
certain deviation from the norm triggers an alert for further investigation.
4. Alert Generation:
 When a transaction is flagged as unusual, an alert is generated and sent to the
institution's compliance or fraud detection team for review.
 The alert includes details of the transaction, such as the amount, date, time,
and the customer's account information, enabling investigators to conduct a
thorough analysis.
5. Investigation and Resolution:
 Upon receiving an alert, investigators conduct a detailed review of the flagged
transaction.
 They may verify the legitimacy of the transaction by reaching out to the
customer directly or by examining additional transaction data and account
history.
 If the transaction is deemed suspicious, appropriate actions are taken, such as
freezing the account, conducting further due diligence, or filing a suspicious
activity report (SAR) with regulatory authorities.

Example: Consider a hypothetical scenario involving a retail banking customer

named John. Based on John's transaction history, the bank has determined that his
typical transaction amounts range from $50 to $200.

One day, a transaction of $5,000 is initiated from John's account, which is

significantly higher than his usual spending pattern. This transaction triggers an alert
based on the "Unusual Transaction Amount" rule.

Upon investigation, it is discovered that John's debit card was used for an
unauthorized purchase. The bank promptly blocks the transaction, freezes John's
account, and contacts him to verify the activity. John confirms that he did not make
the transaction, indicating potential fraud. The bank proceeds to investigate further,
possibly involving law enforcement or regulatory agencies as necessary.

In this example, the implementation of the "Unusual Transaction Amount" rule

enabled the bank to detect and prevent a fraudulent transaction, safeguarding both
the customer's assets and the institution's integrity.

Rule 2: Out-of-Pattern Transactions

Objective: The objective of monitoring out-of-pattern transactions is to identify

transactions that deviate from the usual behavior or spending patterns of a
customer. Detecting such anomalies helps financial institutions uncover potentially
fraudulent activities, such as unauthorized use of an account or identity theft.
 Methodology:

1. Behavioral Analysis:
 Financial institutions collect and analyze historical transaction data to establish
a baseline of normal behavior for each customer.
 This analysis considers various factors, including the customer's spending
habits, transaction frequency, preferred channels (e.g., online, in-person),
typical transaction amounts, geographic locations, and time of day for
transactions.
2. Pattern Recognition:
 Based on the behavioral analysis, institutions identify typical patterns or trends
in a customer's transaction history.
 These patterns serve as a reference point for determining what constitutes
normal behavior for the customer.
3. Real-Time Monitoring:
 Transactions are monitored in real-time as they occur, comparing each
transaction against the established patterns and norms.
 Any transaction that falls outside the expected pattern or exhibits unusual
characteristics triggers an alert for further investigation.
4. Alert Generation:
 When an out-of-pattern transaction is detected, an alert is generated and
routed to the institution's compliance or fraud detection team.
 The alert provides details of the transaction, including the amount, type, time,
location, and customer information, enabling investigators to assess its
legitimacy.
5. Investigation and Resolution:
 Upon receiving an alert, investigators conduct a thorough review of the
flagged transaction.
 They may contact the customer directly to verify the transaction or examine
additional transaction data and account history for context.
 If the transaction is deemed suspicious, appropriate actions are taken, such as
freezing the account, further verification steps, or filing a suspicious activity
report (SAR) with regulatory authorities.

Example: Let's consider a hypothetical example involving a credit card user named
Sarah. Based on Sarah's transaction history, the bank has established that she
typically makes small purchases at local stores during weekdays, with occasional
larger transactions for online shopping on weekends.

One day, a transaction of $2,500 is initiated from Sarah's credit card at an electronics
store located in another state during working hours. This transaction deviates
significantly from Sarah's usual spending pattern and geographic location, triggering
an alert based on the "Out-of-Pattern Transactions" rule.
 Upon investigation, it is discovered that Sarah's credit card information was
compromised, and fraudulent charges were made without her knowledge. The bank
promptly blocks the transaction, contacts Sarah to confirm the activity, and issues her
a new credit card.

In this example, monitoring out-of-pattern transactions enabled the bank to detect

and prevent fraudulent activity, protecting Sarah's account and mitigating potential
financial losses.

Rule 3: Frequency of Operations

Objective: The objective of monitoring the frequency of operations is to identify

instances where a customer conducts transactions at a rate that deviates
significantly from their usual behavior. Detecting such anomalies helps financial
institutions detect potential fraudulent activities, such as account takeover,
unauthorized access, or money laundering.

Methodology:

1. Behavioral Analysis:
 Financial institutions analyze historical transaction data to establish a
baseline of normal behavior for each customer.
 This analysis includes examining the frequency and timing of transactions,
such as the number of transactions per day, week, or month.
2. Threshold Setting:
 Based on the behavioral analysis, institutions set thresholds or ranges for
what constitutes a typical frequency of operations for each customer.
 These thresholds can be determined using statistical methods, such as
calculating the mean or median frequency of transactions, or they can be
predefined based on the institution's risk tolerance and regulatory
requirements.
3. Real-Time Monitoring:
 Transactions are monitored in real-time as they occur, comparing the
frequency of operations against the established thresholds.
 Any instance where the customer exceeds or falls below the expected
frequency of operations triggers an alert for further investigation.
4. Alert Generation:
 When an unusual frequency of operations is detected, an alert is generated
and sent to the institution's compliance or fraud detection team.
  The alert includes details of the transactions, such as the number, type,
time, and customer information, allowing investigators to assess the
situation.
5. Investigation and Resolution:
 Upon receiving an alert, investigators conduct a thorough review of the
flagged transactions.
 They may reach out to the customer directly to verify the transactions or
examine additional transaction data and account history for context.
 If the transactions are deemed suspicious, appropriate actions are taken,
such as freezing the account, further verification steps, or filing a suspicious
activity report (SAR) with regulatory authorities.

Example: Let's consider a hypothetical scenario involving a retail banking

customer named David. Based on David's transaction history, the bank has
established that he typically conducts an average of five transactions per week.

One week, David suddenly initiates 20 transactions within a single day,

significantly exceeding his usual frequency of operations. This spike in activity
triggers an alert based on the "Frequency of Operations" rule.

Rule 4: Transactions Involving High-Risk Countries

Objective: The objective of monitoring transactions involving high-risk countries

is to identify and scrutinize financial activities that involve jurisdictions known for
their weak anti-money laundering controls, high levels of corruption, or links to
terrorist financing activities. By flagging transactions associated with these
countries, financial institutions aim to mitigate the risk of money laundering,
terrorism financing, and other illicit activities.

Methodology:

1. Identification of High-Risk Countries:

 Financial institutions rely on various sources, such as international
watchlists, government agencies, and regulatory bodies, to identify
countries that pose a high risk in terms of money laundering and terrorist
financing.
 These high-risk countries are typically identified based on factors such as
the level of corruption, presence of organized crime groups, lack of
transparency in financial transactions, and inadequate AML/CFT
regulations.
2. Compilation of Risk Criteria:
  Institutions compile a set of risk criteria or indicators associated with
transactions involving high-risk countries.
 These criteria may include large cash transactions, unusual transaction
patterns, transactions involving politically exposed persons (PEPs), or
transactions with counterparties known to be associated with criminal or
terrorist organizations.
3. Real-Time Transaction Monitoring:
 Transactions are monitored in real-time as they occur, with specific focus
on those involving countries identified as high-risk.
 Any transaction originating from, destined for, or passing through a high-
risk country triggers enhanced scrutiny and may be subjected to additional
monitoring and investigation.
4. Alert Generation:
 When a transaction involving a high-risk country is detected, an alert is
generated and routed to the institution's compliance or AML/CFT team.
 The alert includes details of the transaction, such as the amount, origin,
destination, and customer information, enabling investigators to assess the
potential risk and take appropriate action.
5. Enhanced Due Diligence (EDD):
 Transactions associated with high-risk countries undergo enhanced due
diligence procedures to gather additional information and assess the
legitimacy of the transaction.
 This may involve verifying the identity of the parties involved, conducting
additional background checks, and obtaining supporting documentation to
validate the transaction's purpose and source of funds.
6. Investigation and Reporting:
 Investigators conduct a thorough review of the flagged transactions, taking
into account the risk factors associated with the high-risk countries
involved.
 If the transaction is deemed suspicious or indicative of illicit activity, the
institution may file a suspicious activity report (SAR) with regulatory
authorities and take appropriate action, such as freezing the account or
terminating the transaction.

Example: Suppose a financial institution detects a series of large cash

transactions originating from a customer's account and involving remittance to
accounts located in countries known for their weak AML/CFT controls and high
levels of corruption, such as some jurisdictions in West Africa. These transactions
trigger alerts based on the "Transactions Involving High-Risk Countries" rule.
 Upon investigation, it is revealed that the customer, who has no legitimate
business or personal connections to those countries, is conducting these
transactions at the behest of a third party who is using the accounts to launder
money obtained through fraudulent activities.

Rule 5: Round Dollar Amounts

Objective: The objective of monitoring round dollar amounts is to detect

transactions that involve specific dollar amounts with no cents. Such transactions
are often flagged because they are associated with money laundering activities,
structuring, or other illicit financial activities where individuals attempt to evade
detection or reporting requirements.

Methodology:

1. Identification of Round Dollar Amounts:

 Financial institutions identify specific dollar amounts that are considered
round, such as $10, $100, $1,000, $10,000, and so on.
 These round amounts are typically targeted for monitoring because they
are commonly used in structuring transactions to avoid reporting
thresholds or to simplify accounting for illicit activities.
2. Threshold Setting:
 Institutions set thresholds for what constitutes a round dollar amount
transaction. For example, any transaction involving exactly $10,000 may
trigger an alert.
 These thresholds may vary depending on regulatory requirements, risk
assessments, and the institution's internal policies.
3. Real-Time Monitoring:
 Transactions are monitored in real-time as they occur, with a focus on
identifying transactions involving round dollar amounts.
 Any transaction that matches the predefined criteria triggers an alert for
further investigation.
4. Alert Generation:
 When a transaction involving a round dollar amount is detected, an alert is
generated and sent to the institution's compliance or anti-money
laundering (AML) team.
 The alert includes details of the transaction, such as the amount, date, time,
and customer information, allowing investigators to assess the potential
risk and take appropriate action.
5. Investigation and Resolution:
  Upon receiving an alert, investigators conduct a thorough review of the
flagged transaction.
 They may examine additional transaction data, account history, and
customer profiles to determine the legitimacy of the transaction.
 If the transaction is deemed suspicious, further investigation may be
warranted, including contacting the customer, gathering additional
information, and potentially filing a suspicious activity report (SAR) with
regulatory authorities.

Example: Consider a scenario where a bank's transaction monitoring system

detects multiple transactions involving exactly $9,500 deposited into a customer's
account over a short period. Each of these transactions falls just below the
$10,000 threshold that triggers mandatory currency transaction reporting (CTR) to
regulatory authorities.

Upon investigation, it is discovered that the customer is systematically depositing

large sums of cash just below the reporting threshold in an attempt to avoid
triggering CTRs and attracting regulatory scrutiny. This activity is indicative of
structuring, a tactic commonly used by individuals engaging in money laundering
or other illicit financial activities.

Rule 6: Multiple Transactions Below Reporting Threshold

Objective: The objective of monitoring multiple transactions below the reporting

threshold is to detect a pattern of behavior where individuals intentionally
conduct multiple transactions just below the threshold that triggers mandatory
reporting to regulatory authorities. These transactions, known as structuring, are
often indicative of attempts to avoid detection and scrutiny for potentially illicit
activities such as money laundering or tax evasion.

Methodology:

1. Identification of Reporting Threshold:

 Financial institutions identify the threshold amount that triggers mandatory
reporting to regulatory authorities, such as the Currency Transaction
Report (CTR) threshold set by the Financial Crimes Enforcement Network
(FinCEN) in the United States, which is $10,000 for cash transactions.
 Transactions below this threshold are not required to be reported
individually but may still raise suspicion if conducted in a pattern that
suggests structuring.
2. Threshold Setting:
  Institutions set thresholds for the number of transactions conducted below
the reporting threshold within a specified timeframe.
 For example, multiple transactions totaling $9,000 within a 24-hour period
may trigger an alert for further investigation.
3. Real-Time Monitoring:
 Transactions are monitored in real-time as they occur, with a focus on
identifying patterns of behavior involving multiple transactions below the
reporting threshold.
 Any series of transactions that collectively exceed the threshold triggers an
alert for review.
4. Alert Generation:
 When a pattern of multiple transactions below the reporting threshold is
detected, an alert is generated and sent to the institution's compliance or
anti-money laundering (AML) team.
 The alert includes details of the transactions, such as the amounts, dates,
times, and customer information, enabling investigators to assess the
potential risk and take appropriate action.
5. Investigation and Resolution:
 Upon receiving an alert, investigators conduct a thorough review of the
flagged transactions.
 They analyze the transaction data, account history, and customer profiles
to determine the legitimacy of the transactions and whether they are
indicative of structuring or other illicit activities.
 If the transactions are deemed suspicious, further investigation may be
warranted, including contacting the customer, gathering additional
information, and potentially filing a suspicious activity report (SAR) with
regulatory authorities.

Example: Suppose a bank's transaction monitoring system detects a series of

transactions conducted by a customer, each totaling $9,000, within a short
timeframe, such as within a single day or across multiple days. Individually, each
transaction falls below the $10,000 threshold for mandatory reporting to
regulatory authorities.

Upon investigation, it is discovered that the customer is systematically depositing

large sums of cash just below the reporting threshold in an attempt to avoid
triggering mandatory reporting requirements and attracting regulatory scrutiny.
This pattern of behavior, known as structuring, raises suspicions of potential
money laundering or other illicit activities.
 Rule 7: Large Cash Deposits or Withdrawals

Objective: The objective of monitoring large cash deposits or withdrawals is to

detect and investigate transactions involving significant sums of cash. Such
transactions can be indicative of various illicit activities, including money
laundering, tax evasion, or the financing of criminal enterprises. By closely
scrutinizing these transactions, financial institutions aim to mitigate the risk of
facilitating unlawful activities and ensure compliance with regulatory
requirements.

Methodology:

1. Identification of Large Cash Transactions:

 Financial institutions define the threshold amount that constitutes a "large"
cash deposit or withdrawal. This threshold is often determined based on
regulatory requirements and internal risk assessments.
 For example, transactions exceeding $10,000 in cash may be considered
large and subject to enhanced monitoring.
2. Real-Time Monitoring:
 Transactions are monitored in real-time as they occur, with a specific focus
on identifying cash deposits or withdrawals that exceed the predefined
threshold.
 Any transaction meeting or exceeding the threshold triggers an alert for
further investigation.
3. Alert Generation:
 When a large cash deposit or withdrawal is detected, an alert is generated
and sent to the institution's compliance or anti-money laundering (AML)
team.
 The alert includes details of the transaction, such as the amount, date, time,
and customer information, enabling investigators to assess the potential
risk and take appropriate action.
4. Enhanced Due Diligence (EDD):
 Transactions involving large sums of cash undergo enhanced due diligence
procedures to gather additional information and assess the legitimacy of
the transaction.
 This may include verifying the source of funds, obtaining supporting
documentation, and conducting additional background checks on the
customer.
5. Investigation and Resolution:
 Upon receiving an alert, investigators conduct a thorough review of the
flagged transaction.
  They analyze the transaction data, account history, and customer profiles
to determine the purpose and legitimacy of the cash transaction.
 If the transaction is deemed suspicious, further investigation may be
warranted, including contacting the customer, gathering additional
information, and potentially filing a suspicious activity report (SAR) with
regulatory authorities.

Example: Suppose a bank's transaction monitoring system detects a cash deposit

of $15,000 made by a customer at a branch location. This deposit exceeds the
threshold amount set by the institution for large cash transactions.

Upon investigation, it is revealed that the customer, who has no documented

source of income or legitimate business activities, has been making frequent large
cash deposits into their account over a short period. This pattern of behavior
raises suspicions of potential money laundering or other illicit activities.

Rule 8: Sequential Transactions

Objective: The objective of monitoring sequential transactions is to detect

patterns where multiple transactions occur in rapid succession, often with
incremental or sequential values. This rule is designed to identify potential
fraudulent activities, such as card testing, where fraudsters attempt to validate
stolen payment card information by making multiple transactions in a short
timeframe.

Methodology:

1. Definition of Sequential Transactions:

 Financial institutions define sequential transactions as a series of
transactions that occur within a short timeframe and involve incremental or
sequential values.
 These transactions may involve the same account or card number,
indicating repetitive or systematic behavior.
2. Real-Time Monitoring:
 Transactions are monitored in real-time as they occur, with a focus on
identifying patterns of sequential transactions.
 The monitoring system tracks the timing, frequency, and sequence of
transactions to identify suspicious patterns.
3. Pattern Recognition:
 The system analyzes transaction data to identify sequences of transactions
that exhibit characteristics of card testing or other fraudulent activities.
  This may include transactions with incremental amounts (e.g., $1, $2, $3),
sequential card numbers, or transactions made within a short timeframe
(e.g., seconds or minutes).
4. Alert Generation:
 When a pattern of sequential transactions is detected, an alert is generated
and sent to the institution's fraud detection or security team.
 The alert includes details of the transactions, such as the card/account
number, transaction amounts, timestamps, and any other relevant
information.
5. Investigation and Resolution:
 Upon receiving an alert, investigators conduct a detailed review of the
flagged transactions.
 They analyze the transaction data, assess the legitimacy of the transactions,
and determine whether they are indicative of fraudulent activity.
 If the transactions are deemed suspicious, appropriate actions are taken,
such as blocking the card/account, contacting the customer for verification,
or escalating the case for further investigation.

Example: Suppose a bank's fraud detection system identifies a series of

transactions made using the same credit card number within a short timeframe.
The transactions occur sequentially, with incremental amounts of $1 each (e.g.,
$10.00, $11.00, $12.00, etc.).

Upon investigation, it is discovered that these transactions were part of a card

testing scheme, where fraudsters attempted to validate stolen credit card
information by making small, incremental transactions. Once they identify a valid
card, they may proceed to make larger unauthorized purchases.

Rule 9: Uncharacteristic Transaction Channels

Objective: The objective of monitoring uncharacteristic transaction channels is to

detect transactions conducted through channels that are unusual or uncommon
for a particular customer. By identifying such transactions, financial institutions
aim to prevent unauthorized access to accounts, mitigate the risk of fraud, and
enhance security measures.

Methodology:

1. Customer Profile Analysis:

 Financial institutions analyze the transaction history and behavior of each
customer to establish a baseline of their typical transaction channels.
  This analysis considers factors such as the customer's preferred banking
channels (e.g., online banking, mobile banking, ATM, in-person),
geographic location, and historical usage patterns.
2. Identification of Uncharacteristic Channels:
 Institutions identify transaction channels that are considered
uncharacteristic or uncommon for a particular customer based on their
established profile.
 For example, if a customer primarily uses online banking for transactions
but suddenly conducts a large cash withdrawal at an ATM in a different
city, it may be flagged as uncharacteristic.
3. Real-Time Monitoring:
 Transactions are monitored in real-time as they occur, with a specific focus
on identifying transactions conducted through uncharacteristic channels.
 Any transaction that deviates from the customer's typical behavior triggers
an alert for further investigation.
4. Pattern Recognition:
 The monitoring system analyzes transaction data to identify patterns of
behavior that indicate the use of uncharacteristic transaction channels.
 This may include transactions conducted from unfamiliar locations, unusual
transaction types, or channels not previously associated with the
customer's account.
5. Alert Generation:
 When a transaction through an uncharacteristic channel is detected, an
alert is generated and sent to the institution's fraud detection or security
team.
 The alert includes details of the transaction, such as the channel used,
location, amount, date, and time, allowing investigators to assess the
potential risk and take appropriate action.
6. Investigation and Resolution:
 Upon receiving an alert, investigators conduct a thorough review of the
flagged transaction.
 They analyze the transaction data, verify the legitimacy of the transaction
with the customer, and determine whether it was authorized.
 If the transaction is deemed suspicious or unauthorized, appropriate
actions are taken, such as blocking the transaction, freezing the account, or
escalating the case for further investigation.

Example: Suppose a customer named Emily primarily conducts her banking

activities through online and mobile channels. However, the bank's monitoring
system detects a series of in-person transactions made using Emily's debit card at
various retail locations in a city where she doesn't reside.
 Upon investigation, it is discovered that Emily's debit card information was
compromised, and unauthorized transactions were made without her knowledge.
The bank promptly blocks the suspicious transactions, freezes Emily's account,
and contacts her to confirm the activity.

Rule 10: Spike in Account Balance

Objective: The objective of monitoring spikes in account balance is to detect

sudden and significant increases in the balance of a customer's account. This rule
helps financial institutions identify potentially suspicious activities, such as large
deposits from unknown sources, unexpected windfalls, or fraudulent transactions.
By monitoring for spikes in account balance, institutions aim to prevent money
laundering, fraud, and other illicit financial activities.

Methodology:

1. Baseline Account Analysis:

 Financial institutions analyze the historical transaction data and account
activity of each customer to establish a baseline of their typical account
balance.
 This analysis considers factors such as the customer's income, spending
patterns, deposit and withdrawal history, and account behavior over time.
2. Identification of Spike Threshold:
 Institutions set thresholds for what constitutes a significant spike in
account balance based on the customer's established profile and risk
factors.
 For example, a sudden increase in account balance exceeding a certain
percentage or dollar amount compared to the average balance may trigger
an alert.
3. Real-Time Monitoring:
 Account balances are monitored in real-time, with a focus on identifying
sudden and substantial increases beyond the predefined threshold.
 Any account balance that exceeds the threshold triggers an alert for further
investigation.
4. Pattern Recognition:
 The monitoring system analyzes account balance data to identify patterns
of behavior that indicate spikes in balance.
 This may include unexpected large deposits, transfers from unfamiliar
sources, or other transactions contributing to the sudden increase in
balance.
5. Alert Generation:
  When a spike in account balance is detected, an alert is generated and sent
to the institution's fraud detection or security team.
 The alert includes details of the transaction(s) contributing to the spike,
such as the amount, source, date, time, and customer information.
6. Investigation and Resolution:
 Upon receiving an alert, investigators conduct a thorough review of the
flagged account activity.
 They analyze the transaction data, verify the legitimacy of the transactions,
and assess the risk associated with the spike in balance.
 If the transactions are deemed suspicious or unauthorized, appropriate
actions are taken, such as freezing the account, contacting the customer
for verification, or escalating the case for further investigation.

Example: Suppose a bank's monitoring system detects a sudden increase in the

account balance of a customer named John. His account balance typically ranges
between $5,000 and $10,000, but suddenly increases to $50,000 overnight.

Upon investigation, it is discovered that John received a wire transfer of $45,000

from an overseas account, which he did not disclose previously. The bank verifies
the legitimacy of the wire transfer and confirms that it was related to an
inheritance from a deceased relative.