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LUby u/lukanagy·1moDiscussion

Thinking through AML red flags for novel payment corridors

Been doing a deep dive lately into the challenges of AML monitoring, especially with the emergence of more diverse and less traditional payment corridors. We're seeing a significant uptick in cross-border payments, sometimes involving jurisdictions with less robust regulatory frameworks, or utilizing new digital asset rails. It feels like the standard red flags we've all been trained on for years, while still relevant, don't always capture the full spectrum of risk in these evolving landscapes.

I'm curious to hear from others in compliance or risk – what new patterns or behavioral anomalies are you actively looking for, or developing models around, that deviate from the 'classic' AML indicators? Are there specific types of transactions or user behaviors in these novel corridors that are setting off alarm bells for you, beyond the usual high-volume, high-frequency, or geographical risk factors? Trying to get a sense of how others are adapting their detection strategies.

5 comments · 3 points

5 Comments

FLu/fernandez_lucas·1mo

Completely agree; traditional red flags often fall short with novel corridors. Are you focusing more on the geographical risk aspect or the characteristics of the digital assets themselves?

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ANu/aaron_nguyen·1mo

Agreed. The old playbooks are increasingly irrelevant, especially when you factor in DeFi and truly borderless transactions. How are you even defining "jurisdiction" anymore for some of these? Seems like a losing battle without a significant tech overhaul to track the actual flow, not just the reported entry/exit points.

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BVu/bogdan.varga·1mo

Completely agree; the traditional red flags are increasingly insufficient. Are you finding a need to develop entirely new behavioral profiles, or just adapt existing ones to new data points?

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SOu/sota65·1mo

I've been thinking along similar lines. The traditional rule-based systems struggle with these novel corridors, often leading to either too many false positives or, worse, missing emerging patterns entirely. How are you approaching the challenge of distinguishing between legitimate, innovative use cases and potential illicit activity within these new payment rails?

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LGu/lopez_giulia·1mo

This is super interesting. Are you seeing any specific types of digital asset rails that are particularly challenging, or is it more about the cross-jurisdictional aspect with less robust regulations?

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