Reference

Financial crime glossary

The working vocabulary of AML, sanctions, monitoring and fraud — grouped the way the job is organised, in plain English.

50 terms · 8 groups

Reporting & obligations

The filings and statutes the whole discipline is built around.

AMLAnti-money laundering: The discipline of detecting and reporting attempts to disguise illicit funds as legitimate.
BSABank Secrecy Act: The US statute requiring institutions to keep records and report suspicious activity; the legal foundation of the field.
SARSuspicious Activity Report: Filed confidentially with FinCEN when activity may indicate a crime. Its existence may never be disclosed to the subject.
SAR narrative: The written account inside a SAR explaining who, what, when, where, and why it is suspicious. The writing sample of the profession.
CTRCurrency Transaction Report: Filed for cash transactions over $10,000.
314(a) / 314(b): USA PATRIOT Act provisions: 314(a) lets law enforcement query institutions; 314(b) lets institutions share information with each other.
Travel rule: The requirement that originator and beneficiary information travel with funds transfers — now extended to crypto.

How illicit value actually moves, and the names given to each move.

Placement: Stage one of laundering: getting illicit cash into the financial system.
Layering: Stage two: moving funds through transactions to obscure their origin.
Integration: Stage three: the funds re-enter the economy appearing legitimate.
Structuring: Breaking cash transactions into smaller amounts to evade the CTR threshold; a federal crime in itself.
Smurfing: Structuring performed through multiple people making small deposits.
Shell company: An entity with no real operations, often used to hold or move funds while hiding ownership.
TBMLTrade-based money laundering: Moving value through fake or mispriced trade transactions.
Hawala: An informal value-transfer system operating on trust networks outside banking rails.
Money mule: A person who moves illicit funds through their own accounts, knowingly or not.
Typology: A recognized laundering or fraud pattern (e.g. funnel accounts, trade-based laundering).

Knowing who the customer is, and how much scrutiny they earn.

KYCKnow Your Customer: Identifying and understanding a customer before and during the relationship.
CDDCustomer Due Diligence: The regulatory obligation behind KYC — understanding the nature and purpose of the relationship.
EDDEnhanced Due Diligence: The deeper review applied to higher-risk customers.
CIPCustomer Identification Program: The minimum identity verification required at onboarding.
Beneficial owner / UBO: The natural person who ultimately owns or controls a customer entity, behind any layers of shell ownership.
PEPPolitically Exposed Person: Someone with a prominent public function, treated as higher risk for bribery and corruption proceeds.
Risk rating: The score assigned to a customer that drives how much diligence and monitoring they receive.
Adverse media: Negative news screening: checking whether a customer appears in credible reporting on financial crime.

The list-matching side of the house, where a miss is a violation.

OFACOffice of Foreign Assets Control: The US body that administers economic sanctions.
SDN listSpecially Designated Nationals: OFAC's list of parties US persons are prohibited from dealing with.
Sanctions screening: Checking customers and payments against sanctions lists before processing.
Watchlist: Any list screened against: sanctions, PEPs, adverse media, internal blocks.
False positive: A screening or monitoring hit that, on review, does not match or is not suspicious. Most alerts are false positives; the work is proving it.
Fuzzy matching: Screening logic that catches near-matches (spelling variants, transliterations) rather than exact names.

The daily production line most analysts actually work inside.

Transaction monitoring: Automated surveillance of customer transactions against scenarios designed to detect suspicious patterns.
Scenario: A monitoring rule (e.g. rapid movement of funds) that generates alerts when its logic trips.
Alert: A single system-generated flag awaiting analyst review.
Case: An escalated alert or group of alerts under investigation.
Disposition: The documented decision on an alert: close as not suspicious, or escalate.
Escalation: Referring an alert or case to a senior reviewer or the SAR decision process.

Who grades the programme, and what happens when it fails.

FinCENFinancial Crimes Enforcement Network: The US regulator that receives SARs and CTRs and writes BSA rules.
FFIEC manual: The exam manual federal examiners use to evaluate BSA/AML programs; programs are literally graded against it.
Consent order: A public enforcement agreement in which an institution commits to fix program failures, usually with deadlines and sometimes penalties.
Lookback: A retrospective review of past transactions, typically ordered after a program failure.
Remediation: The project work of fixing a deficient program — refreshing files, clearing backlogs, rebuilding controls.
MLROMoney Laundering Reporting Officer: The UK/EU designation of the accountable AML officer.

The parts of the system where risk concentrates.

MSBMoney Services Business: Money transmitters, check cashers, currency exchangers — regulated but non-bank.
Correspondent banking: One bank providing services to another, often across borders — high risk because the customer's customers are invisible.
Nested correspondent: A foreign bank accessing US banking indirectly through another bank's correspondent account; a classic evasion route.
De-risking: Exiting whole categories of customers rather than managing their risk; controversial because it pushes activity into darker channels.
VASPVirtual Asset Service Provider: Exchanges, custodians, and other crypto businesses subject to AML rules.

The loss side, increasingly run under the same roof as AML.

Account takeover: Fraud where a criminal gains control of a legitimate customer's account.
First-party fraud: The customer themselves is the fraudster (e.g. bust-out schemes, false disputes).