Ongoing Monitoring in AML Compliance

Ongoing monitoring has emerged as a cornerstone of effective anti-money laundering (AML) compliance, enabling financial institutions to dynamically respond to evolving criminal methodologies while meeting regulatory requirements. 

This continuous process of scrutinising customer transactions and updating risk profiles represents a paradigm shift from static compliance checks to adaptive risk management. 

By maintaining up-to-date customer information and analysing transaction patterns against evolving risk indicators, organisations can detect suspicious activities that might indicate money laundering or terrorist financing. 

The global regulatory landscape, exemplified by the Financial Action Task Force (FATF) Recommendations and the UK's Money Laundering Regulations 2017, mandates this approach to combat the estimated $2.4 trillion laundered annually through financial systems

In this comprehensive article, we explore why ongoing AML monitoring is so essential and how to implement it effectively, covering everything from sanctions and PEP screening to adverse media checks. We will also explore real-time dynamic risk assessment for ongoing CDD and EDD.

What is Ongoing Monitoring in AML?

KYC and AML process is not a one-time activity, and customer risk profiles are never static – they evolve over time. This means compliance teams never truly finish their due diligence after onboarding a client. 

Ongoing monitoring is the continuous process of reviewing customers and their activities to detect emerging risks of money laundering or terrorist financing. 

In the broader AML lifecycle, ongoing monitoring serves as a critical defence layer long after initial KYC checks are done. It helps financial institutions and other regulated firms spot if a customer’s risk level changes, if they appear on new watchlists, or if their behaviour becomes suspicious. 

Read More: What is AML Screening?

The Role Ongoing Monitoring in AML

In the AML compliance lifecycle (customer due diligence, monitoring, reporting, etc.), ongoing monitoring plays a pivotal role. Unlike one-off onboarding checks, a robust ongoing AML monitoring continuously reviews and screens customers to identify changes in risk profiles or suspicious activities. 

Ongoing Monitoring ensures that businesses remain vigilant throughout the customer relationship. This process is vital for several reasons:

• Regulatory Compliance: Global standards, such as those set by the Financial Action Task Force (FATF), mandate ongoing due diligence to ensure businesses keep customer data up-to-date and relevant.
• Risk Mitigation: A client might have been low risk when first onboarded, but could become involved in illicit activity later. Without ongoing monitoring, a bank might remain “completely exposed” to this new risk and unaware of criminal activity starting under its roof. Continuous monitoring ensures such changes do not go unnoticed.
• Fraud Prevention: Money launderers and fraudsters may look like real customers and may pass initial AML checks. But, over time their transactional patterns or other warning signs are likely to emerge. Ongoing monitoring increases the chance of detecting these patterns and prevent financial crimes.
• Adapt to Changing Risk Profiles: Even honest customers’ risk levels can change. For example, after a foreign election, an existing client might suddenly become a Politically Exposed Person (PEP), or new information could surface linking them to other criminal activities. Ongoing monitoring will flag these developments so the institution can investigate and adjust the customer’s risk rating accordingly. In essence, it tracks both customers and their activities over time to spot any red flags that warrant action.
• Reputation and Trust: A robust AML program, including effective Ongoing Monitoring, enhances customer trust and protects an organization’s reputation by demonstrating a commitment to security.

By maintaining this continuous awareness, financial institutions protect themselves from regulatory penalties and reputational damage that could arise from failing to detect money laundering in a timely manner. Indeed, regulators worldwide now regard ongoing monitoring as a fundamental requirement of any AML programme. 

In short, ongoing monitoring is the backbone of an effective AML compliance framework, ensuring that vigilance against financial crime is not a one-time event but a perpetual effort.

Examples of AML Ongoing Monitoring

An effective ongoing monitoring programme has several key components that work together to continuously screen and review customers. These include PEP screening, sanctions screening, watchlist monitoring, and adverse media monitoring, among other elements. Each component focuses on a different type of risk indicator, and together they provide a 360-degree view of a client’s risk. Below, we examine each component in detail.

Ongoing PEP Screening

Politically Exposed Persons (PEPs) are individuals entrusted with prominent public functions and present a higher money laundering risk. Global bodies like the FATF require continuous PEP monitoring as part of a risk-based approach.

Financial institutions must apply Enhanced Due Diligence (EDD) when a customer is flagged as a PEP. This includes verifying the source of wealth, senior management approval, and ongoing risk reviews.

Modern AML monitoring systems use global PEP databases with name-matching algorithms to detect matches, even with aliases or spelling variations. Systems also assign dynamic risk scores, helping compliance teams prioritise reviews.

Failure to maintain PEP screening and monitoring controls can result in penalties. For instance, in 2019, a major global bank paid $1.1 billion in fines for PEP monitoring failures. Ongoing AML monitoring solutions ensure clients are re-assessed if their status changes due to elections or appointments.

Read More: What is PEP Screening?

Ongoing Sanctions Screening

Sanctions screening is another non-negotiable component of AML monitoring. Financial institutions must ensure they are not dealing with individuals, entities, or countries that are subject to economic sanctions. These sanctions lists – issued by bodies like the U.S. Office of Foreign Assets Control (OFAC), United Nations, European Union, UK’s OFSI, and others – include known terrorists, proliferators, criminal syndicates, corrupt officials, and companies or regimes under international embargoes.

However, sanctions screening is easier said than done. The sanctions landscape is constantly changing – lists are updated frequently (often weekly or even daily) as geopolitical events unfold

In 2022 alone, OFAC added over 2,275 names, showing the need for real-time ongoing AML monitoring. Advanced AML compliance tools update lists automatically and generate alerts when customers match sanctions entries.

Sanctions screening systems generate alerts whenever a potential match is found between a customer (or transaction party) and a name on a sanctions watchlist.

Industry estimates indicate between 90% and 99% of sanctions screening hits are false positives, requiring efficient filtering and investigative capacity and the cost of non-compliance is severe. 

Banks have paid multi-million-dollar fines for sanctions monitoring failures. For example, Standard Chartered’s $1.1 billion fine mentioned earlier was due in part to processing transactions for sanctioned entities.

Read More: What is Sanction Screening?

Ongoing Watchlist Monitoring

Beyond PEP and sanctions lists, there are many other watchlists and databases that firms must monitor as part of a comprehensive AML programme. Watchlist monitoring is a broad term covering checks against various lists of persons or organisations flagged for reasons related to financial crime. These can include lists of known or suspected criminals, terrorists, narcotics traffickers, fraudsters, or other prohibited persons compiled by law enforcement and regulatory authorities. 

The goal is to detect if a customer or a related party appears on any relevant list that signals risk. For example, if a client shows up in a law enforcement watchlist as being under investigation for financial crime, the bank would want to know immediately. 

Continuous AML monitoring will automatically alert compliance when a new name on a watchlist matches an existing customer, or if an existing watchlist entry is updated with details that match a customer.

Real-time watchlist detection is therefore an integral component of ongoing monitoring. Much like sanctions screening, it requires up-to-date data feeds and efficient matching algorithms.

Read More: What is Watchlist Screening?

Adverse Media Monitoring (Negative News Screening)

Adverse media monitoring – also called negative news screening – is the practice of continually scanning news sources and media for any negative or derogatory information about a client. 

This component of AML ongoing monitoring has become increasingly critical in recent years. It recognises that not all risk information comes in the form of official lists or legal designations. It could be the first indications of potential risk by a customer that appeared in news articles, press reports, or other open-source media long before any official action is taken.

Regulators have begun to explicitly encourage and even require adverse media checks as part of Customer Due Diligence. In the United States, the 2018 CDD Rule from FinCEN introduced a requirement for banks to “continuously monitor media sources” for any new negative information on their customers.

Performing adverse media searches means scouring a wide range of sources – online news, journals, sanction press releases, databases of court cases, and even social media in some instances – for any mention of the customer that could indicate involvement in illicit activities.

By catching such red flags promptly, the institution can re-evaluate the customer’s risk rating and decide on next steps. 

In summary, adverse media monitoring provides an early warning system, helping identify potential high-risk individuals or entities through publicly available information.

Read More: What is Adverse Media Screening?

Handling Alerts and Investigating Hits

Each of the monitoring components above – PEP checks, sanctions, watchlists, and adverse media – will generate alerts or “hits” whenever a potential issue is detected. A critical aspect of continuous AML monitoring is how an institution handles these alerts. 

Given the volume of screening across thousands or millions of customers, alert management can be challenging. Compliance teams often face “alert fatigue” from the sheer number of notifications, especially since many are false positives. To manage this, firms need well-defined workflows, skilled analysts, and intelligent technology.

Prioritising Alerts in Continuous AML Monitoring

Not all alerts are equal. A good practice is to prioritise alerts based on risk. For instance, a direct name match to an OFAC-sanctioned terrorist would be treated with utmost urgency, whereas a partial match to a common name on a PEP list might be lower priority. Systems can assist by assigning risk scores to alerts (for example, flagging an exact match and known high-risk keywords). This helps analysts focus on the truly suspicious hits first.

Investigation and Resolution

For each alert, a compliance analyst must investigate to determine if it is a true match and what action is needed. This can involve gathering more information: for a sanctions or watchlist alert, comparing the customer’s full identity data (name, date of birth, address) with the list entry to see if it’s the same person. Often, false positives are cleared by noting differences (e.g. the sanctioned “John Smith” has a different birthdate or middle name than the customer). 

On the other hand, if an alert does appear to be a true match – say, the customer is the individual on a sanctions list or negative news report – then the institution must take action in line with its policies and legal requirements. 

This could mean blocking a transaction, freezing an account, filing a report to authorities, or terminating the relationship, depending on the scenario. Every decision in this process should be documented to provide an audit trail for regulators and future reviews.

False Positive Reduction

Because compliance teams historically see around 90% or more alerts as false positives, reducing these is a key aim of improving efficiency. Modern screening solutions leverage techniques like fuzzy matching algorithms, machine learning, and fine-tuned rules to cut down on irrelevant alerts. 

For example, AI-powered name matching can better distinguish between different individuals, and contextual filters can ignore hits on terms that are not risky (like benign phrases in news text). 

By some estimates, advanced systems can achieve a significant reduction in false positives – up to 70% fewer irrelevant alerts, by using smarter screening technology. Fewer false positives mean less wasted effort and more time for analysts to investigate genuine issues.

Escalation and Reporting: When a true risk is confirmed from an alert, firms must have clear escalation paths. For instance, filing a Suspicious Activity Report (SAR) to the financial intelligence unit, or in the case of a sanctions hit, notifying the appropriate authority (such as OFAC in the US or OFSI in the UK) promptly. 

Handling alerts properly thus ensures not only internal risk mitigation but also that the institution meets its legal obligations to report and address financial crime.

In summary, handling hits and alerts in ongoing monitoring is about having the people, process, and technology to efficiently separate the signal from the noise. 

A combination of skilled compliance investigators and smart case management software (often integrated into AML solutions) is used to track each alert from generation to resolution. Strong documentation of each step is essential – regulators will expect to see evidence of why an alert was cleared or what actions were taken on a positive hit. 

By investing effort into alert handling capabilities, organisations can greatly improve the effectiveness of their continuous monitoring programme and avoid drowning in a sea of false alarms while ensuring real threats are swiftly dealt with.

The Role of Ongoing AML Monitoring in Dynamic Risk Assessment

A core strength of any ongoing AML monitoring is its reliance on real-time data. With customer risk profiles constantly evolving, financial institutions must ensure that continuous AML monitoring systems maintain up-to-date compliance data, including sanctions lists, PEP databases, adverse media sources, and customer information.

Real-time data updates are critical. Institutions must pull the latest sanctions entries immediately after publication or update PEP records as new political appointments occur. Similarly, continuous scanning of global media for adverse news ensures immediate detection of emerging risks.

For example, if a customer is added to a sanctions list today, a firm with robust ongoing AML monitoring software can instantly flag and freeze the account. Without continuous AML monitoring, such risks might only be detected during periodic reviews, by which time prohibited transactions could have taken place.

Dynamic Customer Risk Assessment

Historically, risk ratings were assigned at onboarding and revisited infrequently. However, modern regulatory expectations require a continuous AML monitoring approach where risk scores dynamically update as new data emerges.

This concept of “perpetual KYC” ensures that a customer’s risk profile reflects current activities, not outdated assumptions. For instance, a sudden adverse media hit may automatically raise a client’s score from medium to high risk, triggering enhanced due diligence (EDD).

Conversely, if a previously flagged issue is resolved, the system may reduce the risk score. However, in most cases, increases are more common as part of proactive ongoing AML monitoring.

Machine Learning and Real-Time Analytics

Advanced AML compliance platforms leverage machine learning to analyse vast volumes of transactions and behavioural patterns across customers. By monitoring these data streams continuously, institutions can detect subtle shifts that may indicate money laundering activities.

The Federal Financial Institutions Examination Council (FFIEC) stresses the importance of performing ongoing due diligence proportionate to the customer’s risk profile. Key factors include transaction volumes, geographic risk exposure, ownership changes, new watchlist hits, and updated customer information—all critical elements in continuous AML monitoring frameworks.

For example, if a low-risk client begins transacting heavily in high-risk jurisdictions, dynamic risk models within ongoing AML monitoring systems will automatically elevate their risk rating and notify compliance teams.

The Power of Integrated Compliance Technology

Leading solutions like Binderr offer integrated platforms for ongoing AML monitoring, consolidating customer data, sanctions and PEP screening, and adverse media checks into a single, automated workflow.

Binderr’s AI-driven platform syncs live data feeds with customer profiles, ensuring that any regulatory update or risk event is immediately reflected. Whether a new sanctions listing or a jurisdictional risk rating change occurs, continuous AML monitoring tools update the client’s risk score in real time.

This level of automation empowers firms to stay ahead of emerging threats and eliminates reliance on outdated batch processes.

Integrating Ongoing AML Monitoring with CDD and EDD

Ongoing AML monitoring is not a standalone process; it is tightly embedded within Customer Due Diligence (CDD) and Enhanced Due Diligence (EDD), forming the backbone of any effective AML compliance programme.

Regulators worldwide, including the UK’s Money Laundering Regulations, mandate firms to “conduct ongoing monitoring of a business relationship”. This includes monitoring customer transactions, updating KYC records, and actively detecting emerging risks throughout the lifecycle of the relationship.

Continuous AML monitoring ensures that after initial onboarding, firms maintain a real-time understanding of customer risk by refreshing data and detecting suspicious activity as it arises.

Read More: Difference Between CDD and EDD

Ongoing Monitoring in Global CDD Requirements

All major global AML frameworks, including the US FinCEN Customer Due Diligence Rule, designate ongoing AML monitoring as a regulatory obligation.

Known as the “fifth pillar” of AML compliance in the US, the rule ties monitoring of suspicious transactions directly to the CDD process. Regulators in Canada, Australia, India, and the EU follow similar standards, embedding continuous AML monitoring into customer due diligence to ensure risk profiles remain current and accurate.

How Ongoing Monitoring Interacts with CDD and EDD

The relationship between ongoing AML monitoring, CDD, and EDD is risk-driven:

• Standard CDD applies to all customers with basic identification, risk assessment, and periodic ongoing AML monitoring.
• EDD applies to high-risk customers such as PEPs, clients in high-risk industries, or those from high-risk jurisdictions. EDD involves more frequent reviews, senior management approval, and continuous AML monitoring of transactions and activities.

For example, a low-risk customer under CDD may only be reviewed every few years, while a high-risk customer under EDD could be subject to monthly transaction reviews, continuous watchlist screening, and frequent KYC refreshes.

Read More: What is Customer Due Diligence CDD?

Triggers for Escalation from CDD to EDD

A critical function of ongoing AML monitoring is to provide event-driven triggers to escalate a customer from CDD to EDD when their risk profile changes.

Examples include:

• Detection of suspicious transaction patterns.
• Identification in adverse media or negative news screening.
• Appointment to a political role resulting in PEP status.

Such events require immediate reassessment and application of enhanced measures. Regulators expect firms to dynamically re-classify customer risk, not merely rely on static onboarding profiles.

Read More: What is Enhanced Due Diligence EDD?

Moving Towards Perpetual KYC

Many leading institutions now embrace a “perpetual KYC” model powered by continuous AML monitoring. Instead of fixed periodic reviews, customer data is updated incrementally in real time.

This includes:

• Automatically refreshing customer information upon detecting changes (e.g. address, ownership, corporate registry updates).
• Event-driven reviews triggered by automated alerts.

This approach makes CDD a living process, improving responsiveness and allowing high-risk customers to receive immediate and appropriate scrutiny under EDD protocols.

In essence, ongoing AML monitoring acts as the operational engine that keeps CDD dynamic and ensures EDD is swiftly applied when new risks emerge.

Global Regulatory Expectations for Ongoing AML Monitoring

Regulators worldwide recognise the vital role of ongoing AML monitoring in preventing financial crime. It is no longer optional; it is a core legal requirement under nearly all modern AML frameworks.

United Kingdom and Europe

In the UK, the Money Laundering Regulations 2017 (as amended) mandate firms to conduct continuous AML monitoring. This includes scrutinising customer transactions to ensure they align with the expected business profile and conducting periodic reviews to update records and KYC documentation.

The UK Financial Conduct Authority (FCA) has consistently penalised institutions for failing to maintain proper ongoing monitoring of high-risk clients.

Across Europe, the 4th, 5th, and 6th AML Directives (AMLD) reinforce these expectations. The EU mandates ongoing due diligence based on customer risk level, including adverse media screening as part of continuous AML monitoring for high-risk customers.

Many European banks adopt structured review cycles:

• High-risk customers reviewed annually
• Medium-risk every 3 years
• Low-risk every 5+ years

These are supplemented by real-time event-triggered updates, enabled through ongoing AML monitoring systems.

United States

In the US, FinCEN’s Customer Due Diligence Rule (2018) added ongoing AML monitoring as a formal requirement. Institutions must update customer profiles whenever new risks arise and actively file Suspicious Activity Reports (SARs) when suspicious transactions are detected.

The Federal Financial Institutions Examination Council (FFIEC) emphasises that continuous AML monitoring is critical to understanding customer behaviour and uncovering potentially suspicious activity in real time.

Other Major Jurisdictions

Similar obligations exist globally:

• Canada: Updated the Proceeds of Crime and Terrorist Financing Act to require ongoing monitoring for all reporting entities.
• Australia (AUSTRAC): Enforces continuous AML monitoring to mitigate money laundering and terrorist financing risks.
• India (RBI): Strengthened requirements for ongoing monitoring in its AML guidelines.
• FATF International Standards: Incorporate ongoing due diligence and continuous customer monitoring as key elements of effective AML/CFT frameworks.

Best Practices for Continuous AML Monitoring

Implementing an effective ongoing AML monitoring programme can be complex, but global best practices and industry insights offer clear guidance. These approaches help institutions maximise compliance while controlling costs and operational strain.

Adopt a Risk-Based, Continuous Risk Scoring Model

A key principle of continuous AML monitoring is dynamic, risk-based assessment. Institutions must move beyond static, onboarding-only risk scoring and instead maintain customer profiles that update in real time as new information becomes available.

Examples include changes in customer behaviour, new sanctions or PEP list hits, or emerging geopolitical risks.

By prioritising ongoing risk assessment, compliance teams ensure that higher-risk clients receive greater scrutiny, while lower-risk customers do not consume disproportionate resources. This approach enables ongoing AML monitoring systems to scale efficiently.

Leverage Automation and Advanced Technology

The sheer volume of data—covering transactions, screening lists, and adverse media—makes manual monitoring impractical.

Leading compliance programmes deploy automation, AI, and machine learning to enhance ongoing AML monitoring. Machine learning models can detect unusual transaction patterns, while automated screening tools ensure real-time updates from global sanctions and PEP databases.

Platforms like Binderr unify these functions into a single solution, providing automated sanctions, PEP, and adverse media screening, digital identity verification, and dynamic risk scoring.

Binderr’s AI-powered screening has demonstrated up to a 70% reduction in false positives, dramatically decreasing alert fatigue and allowing compliance analysts to focus on genuine threats.

This is the future of scalable, accurate continuous AML monitoring.

Maintain Strong Documentation and Audit Trails

A common regulatory expectation is that ongoing AML monitoring activities must be fully documented. Compliance teams must record every stage, including initial risk assessments, alert reviews, investigation outcomes, and any reports filed.

Modern AML monitoring solutions should automatically log these actions, creating an audit trail that satisfies regulatory inspections and supports internal audits.

Comprehensive documentation is essential for both regulatory compliance and internal quality assurance.

Continuously Review and Improve Monitoring Systems

An effective ongoing AML monitoring system should be treated as a living process. Regularly assess its performance using key metrics such as false positive rates, case resolution times, and successful detection rates.

Be ready to respond to regulatory changes, industry benchmarks, or new risks such as crypto wallet address monitoring or expanded watchlists. Continuous tuning ensures that the programme remains effective against emerging financial crime threats.

Bottom Line

Ongoing AML monitoring is the cornerstone of modern AML compliance in a world where customer risk profiles and criminal tactics evolve rapidly. It extends KYC principles far beyond onboarding, ensuring that no critical risk change goes undetected—whether it’s a client becoming politically exposed, a new sanctions designation, emerging negative news, or suspicious transaction activity.

A truly robust continuous AML monitoring programme integrates all key components: PEP screening, sanctions screening, watchlist checks, and adverse media monitoring. These elements work together to detect potential threats and keep risk assessments continuously up to date.

The global regulatory landscape leaves no doubt. Regulators in the UK, EU, US, Canada, Australia, and India explicitly require institutions to implement ongoing AML monitoring as a legal and operational standard. Compliance is no longer a one-time obligation; it is a continuous commitment throughout the customer lifecycle.

Today’s advanced compliance platforms, such as Binderr, make ongoing AML monitoring more efficient and effective. Binderr’s integrated technology automates sanctions, PEP, and adverse media screening, dynamically updates risk scores, and consolidates all due diligence processes into a single secure platform.

Ultimately, ongoing AML monitoring is about staying ahead of threats—continually observing, detecting, and reacting to risks as they emerge. For compliance professionals and financial institutions, fostering a culture of perpetual vigilance is not only an industry standard but a competitive necessity.

Those who excel at continuous AML monitoring will not only avoid regulatory penalties but also safeguard the integrity of the global financial system—one transaction and one updated customer profile at a time.