What does 'Suspicious Activity' mean?

Suspicious Activity in the context of Anti-Money Laundering (AML) refers to any financial transaction or behavior that appears irregular, unusual, or inconsistent with a customer’s known profile or business activities. AML software identifies these activities by analyzing transaction patterns, customer behavior, and other risk indicators. When suspicious activity is detected, the software flags it for further investigation or reporting to the relevant authorities, such as financial regulators. This feature is essential for preventing money laundering, fraud, or terrorist financing. By automating the detection of suspicious activity, the software helps organizations comply with regulations and mitigate financial crime risks effectively.