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Suspicious Activity Report (SAR)
A Suspicious Activity Report (SAR) is a document that financial institutions and certain businesses are required to file with regulatory authorities when they detect potentially suspicious transactions or behaviors that may indicate illegal activity. These could include money laundering, fraud, and terrorist financing. SARs are part of anti-money laundering (AML) and counter-terrorist financing (CTF) obligations. Institutions must file these reports promptly when they observe transactions that deviate from a customer’s normal behavior or raise red flags.
Filing SARs ensures regulatory compliance and safeguards the integrity of the financial system. Organizations need effective monitoring systems to detect unusual activity and ensure that SARs are submitted accurately and in a timely manner. Properly handling SARs requires balancing compliance with customer confidentiality. Organizations must avoid alerting those under investigation. Regular training and awareness programs can help employees recognize suspicious activity and reduce potential oversight.