In terms of regulatory compliance, what does "monitoring" involve?

Monitoring in the context of regulatory compliance refers to the ongoing observation of practices and transactions to ensure they comply with applicable laws and regulations. This process is vital in a banking or financial environment, as it helps identify any potential risks or violations before they escalate into significant issues. Monitoring involves a continuous assessment of operations, compliance with internal policies, adherence to external regulations, and transaction screening to detect any anomalies or fraudulent activities.

This proactive approach allows organizations to ensure they meet their compliance obligations consistently and can adjust practices as necessary in response to changes in regulations or business operations. Regular monitoring not only helps in detecting and preventing compliance failures but also reinforces a culture of accountability and adherence to legal requirements within the institution.