In order to comply with regulatory requirements to report suspicious transactions to the appropriate authorities
We need to be able to monitor customer activity and identify unusual or suspicious patterns of activity.

On-going monitoring is an essential aspect of effective KYC procedures.
Banks can only effectively control and reduce their risk if they have an understanding of normal and reasonable account activity of their customers so that they have a means of identifying transactions which fall outside the regular pattern of an account’s activity.

Without such knowledge, they are likely to fail in their duty to report suspicious transactions to the appropriate authorities in cases where they are required to do so.
The extent of the monitoring needs to be risk-sensitive.
For all accounts, banks should have systems in place to detect unusual or suspicious patterns of activity.
This can be done by establishing limits for a particular class or category of accounts.
Particular attention should be paid to transactions that exceed these limits.

Certain types of transactions should alert banks to the possibility that the customer is conducting unusual or suspicious activities.
They may include transactions that do not appear to make economic or commercial sense,
or that involve large amounts of cash deposits that are not consistent with the normal and expected transactions of the customer.
Very high account turnover, inconsistent with the size of the balance, may indicate that funds are being “washed” through the account.
Examples of suspicious activities can be very helpful to banks and should be included as part of a jurisdiction’s anti-money- laundering procedures and/or guidance.