AML & Compliance

What is typology?

A documented pattern or method of financial crime that describes how specific types of fraud, money laundering, or terrorism financing are carried out. Regulatory bodies, financial intelligence units, and industry groups publish typologies to help institutions recognize emerging threats and update their detection systems accordingly. Typologies form the basis for transaction monitoring rules and scenarios.

How it works

Example: FATF publishes a new typology describing how trade-based money laundering is conducted through over-invoicing of goods between related companies in different countries. Banks update their trade finance monitoring rules to detect the identified patterns.