Transactions Inconsistent with Profile
The cornerstone of transaction monitoring is understanding the customer's expected activity and flagging anything that deviates from it. A customer whose account typically processes modest domestic payments suddenly receiving large international wire transfers warrants immediate attention. The FCA expects firms to maintain a clear picture of each customer's risk profile and to have systems that detect anomalies against that baseline — a requirement Barclays failed to meet in the Stunt & Co case.
Seven Key Transaction Red Flags
Unusually Large Amounts
Transactions significantly larger than the customer's normal pattern
Rapid Cross-Border Transfers
Sequential transfers across multiple jurisdictions, especially high-risk countries
Round-Figure Payments
Exact round amounts with no connection to an invoice or contract
Structuring (Smurfing)
Breaking large sums into smaller transactions to avoid reporting thresholds
Multiple Accounts
Multiple accounts with no clear purpose and funds moving rapidly between them
No Clear Business Purpose
Transactions with no apparent economic or lawful purpose
Third-Party Funding
Funds from unrelated third parties with no clear explanation
In the Stunt & Co case, round-figure payments formed part of the suspicious transaction pattern that should have triggered earlier investigation. The payments showed classic red flags — round figures, high volume, no clear commercial rationale — yet the monitoring systems did not catch them in time.
Red Flag Identification Quiz
Read each scenario and decide: is it a red flag or legitimate activity? Answer all 8 to complete this section.