What does transaction monitoring entail for APIs?

Transaction monitoring for APIs involves tracking and analysing transactions to detect suspicious activities, unusual patterns or behaviour, compliance breaches, and to ensure regulatory requirements are met.

How is risk profiling applied to customers or transactions?

Risk profiling involves classifying customers and transactions based on factors such as transaction size, frequency, geography, customer type, and historical behaviour to allocate appropriate levels of monitoring.

What are thresholds & alert logic and how are they set?

Thresholds and alert logic are rules (e.g. transaction amount, frequency, geographic origin) set within monitoring systems. When a rule is triggered, an alert is generated for further investigation.

Why is a gap analysis necessary in monitoring frameworks?

Gap analysis helps identify where your current controls, system, policies or operations fall short of regulatory expectations or best practice, enabling remediation before regulatory issues occur.

How often should the alert rules and monitoring system be reviewed?

It’s best practice to review monitoring rules, thresholds and risk profiles periodically (e.g. annually or when there are regulatory changes or unusual transaction trends) to ensure effectiveness and minimize false positives/negatives.

What is the escalation process for suspicious activity or alerts?

Escalation involves internal review of alerts, investigation of suspected issues, documentation, and where required, reporting to the relevant regulatory or law enforcement authorities following established procedures.

How do you measure the effectiveness of transaction monitoring and risk assessment frameworks?

Effectiveness is measured through metrics such as alert volumes, false positives vs true positives, timeliness of investigations, number of incidents reported, audit outcomes and feedback from regulators.

What are common challenges in implementing these frameworks?

Challenges include setting appropriate thresholds, managing false positives, ensuring data quality, integrating transaction monitoring systems with existing systems, keeping up with evolving risks and maintaining resources for investigations.

Transaction Monitoring & Risk Assessment Frameworks

Transaction Monitoring and Risk Assessment Frameworks

At ABM Global, we provide end-to-end design and implementation of transaction monitoring and risk assessment frameworks tailored to the needs of Small and Authorised Payment Institutions (SPIs/APIs). Our solutions go beyond basic monitoring, enabling your firm to detect, assess, and respond to financial crime risks in real time, while remaining fully compliant with FCA, HMRC, and AML/CFT requirements. By integrating regulatory expectations with operational realities, we help your firm maintain robust oversight, mitigate risks, and demonstrate a proactive compliance culture.

Automated Monitoring Systems

We implement advanced, automated transaction monitoring systems that track customer activity across multiple channels, payment types, and geographies. These systems are configured with customizable thresholds, rules, and alerts, allowing your firm to detect unusual or suspicious patterns efficiently. By automating routine monitoring tasks, we enhance accuracy, consistency, and operational efficiency, freeing your team to focus on high-priority alerts and investigations.

Risk-Based Client & Transaction Scoring

ABM designs risk assessment frameworks that assign scores to clients, transactions, and products based on risk factors such as geography, transaction volume, client profile, and historical activity. This approach enables prioritization of high-risk activities, ensures enhanced due diligence is applied where necessary, and aligns with regulatory expectations for risk-based monitoring.

Alert Management and Escalation Protocols

Our frameworks include structured alert management processes, ensuring that suspicious activity is identified, investigated, and escalated according to predefined protocols. We help define roles, responsibilities, and reporting lines, so your team can respond quickly and document actions effectively, maintaining audit-ready compliance records

Regulatory Alignment and Reporting

All monitoring and risk assessment processes are fully aligned with FCA, HMRC, and FATF guidance, ensuring that your systems can support regulatory inspections, audits, and reporting obligations. ABM also provides guidance on Suspicious Activity Report (SAR) preparation, regulatory notifications, and management information (MI) reporting.

Continuous Improvement and Adaptation

Our support does not end at implementation. ABM helps your firm continuously refine thresholds, rules, and scoring models to adapt to emerging risks, changing regulatory expectations, and evolving business operations. This ensures that your transaction monitoring and risk assessment framework remains dynamic, effective, and regulator-ready.