FinTech UK RegTech AML Transaction Monitoring Platform

Powered Transaction Monitoring

ML transaction monitoring replacing rules-only: (1) feature engineering (transaction amount, frequency, counterparty diversity, geographic spread, time-of-day pattern, round-number ratio, cash-equivalent transactions), (2) unsupervised anomaly detection (Isolation Forest -- detects unusual transaction patterns per customer baseline), (3) supervised classification (XGBoost -- trained on labelled historic alerts: confirmed SAR vs false positive), (4) network analysis (graph ML -- detect circular transactions, beneficial ownership chains, counterparty networks), (5) alert prioritisation (ML risk score replaces rules threshold -- top 10% highest-score alerts reviewed first).

False positive rate target

reduce from 94% (rules-only) to below 40% (ML + rules combined).

NCA ELMER typologies

ML features aligned to NCA published money laundering typologies.

Sanctions screening at scale

• 1ComplyAdvantage API (customer onboarding screening and daily rescreening -- OFAC, HMRC Sanctions, UN, EU retained),
• 2HMRC Deferred Debit Prevention (DAML -- pre-transaction sanctions check for high-risk payments),
• 3fuzzy name matching (Jaro-Winkler distance -- catches transliteration variants),
• 4PEP (Politically Exposed Person) screening (ComplyAdvantage PEP data -- enhanced due diligence trigger),
• 5adverse media screening (ComplyAdvantage adverse media API -- negative news about customer or counterparty).

Daily rescreening

280,000 customers rescreened daily against updated sanctions lists (batch processing via AWS Batch overnight -- 6-hour processing window).

SAR Workflow and NCA goAML

SAR (Suspicious Activity Report) workflow: FCA expects SARs filed within 24 hours of decision to file.

SAR workflow

• 1alert generated (ML score above SAR threshold),
• 2analyst review (analyst reviews alert evidence -- transaction history, network graph, news),
• 3SAR decision (file SAR or close alert -- documented rationale either way),
• 4SAR draft (goAML XML format -- customer details, suspicious transactions, narrative),
• 5NCA goAML submission (API submission -- goAML acknowledgement reference).

TIPPING OFF PREVENTION

system must not allow customer to know SAR has been filed (Proceeds of Crime Act 2002 s.333A).

Tipping off control

SAR workflow on separate access-controlled subsystem -- customer-facing staff cannot see SAR status.

FCA JMLSG Guidance Compliance

FCA JMLSG (Joint Money Laundering Steering Group)

Guidance

• industry-wide best practice guidance for UK financial services AML.
• JMLSG-aligned controls: (1) risk-based approach (ML risk score enables genuine risk stratification -- not all customers treated equally), (2) customer risk assessment (ML features used to calculate customer AML risk score -- updates with each transaction), (3) enhanced due diligence triggers (ML identifies customers with elevated risk -- triggers EDD review), (4) training and awareness (FCA expects all staff who handle payments to complete AML training -- LMS tracking integrated), (5) periodic review (ML model retrained quarterly -- model drift monitored, JMLSG expects continuous improvement).

HMRC DAML

Defence Against Money Laundering consent -- for transactions involving proceeds of crime where firm has knowledge or suspicion.