Banks and credit unions are required to be looking out for their clients’ and members’ transactions when it comes to meeting Canada’s FINTRAC requirements who have entrusted them with their life savings and investments. Consumers have a realistic expectation that the financial institution has their best interests in mind to protect their most precious assets and do everything possible to avoid unnecessarily sending money to proceeds of crime.
Most, if not all financial institutions of any magnitude in terms of total worth, have compliance professionals like Anisha Biju, who are dedicated to making sure they are looking out for red flags and suspicious transactions that can be stopped before it is too late.
The LinkedIn posting from Anisha Biju below hits the mark on what needs to be done to prevent scams from happening through financial institutions. The comment on Biju’s posting from Farhan Zaheer reinforces how well she has succinctly stated her message.
Anisha BijuAnisha Biju • Finance & Compliance Professional
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🚦 KYC vs KYT: The Power Duo Behind Effective Transaction Monitoring
Most people think Transaction Monitoring = looking at transactions.
But here’s the truth 👇
TM fails without KYC.
TM is blind without KYT.
And compliance becomes reactive instead of proactive.
👤 KYC — Know Your Customer
KYC answers: Who is this customer supposed to be?
It sets the expectation baseline:
Who they are
What they do
Their risk profile
What “normal” activity should look like
KYC is the story you expect to read.
💸 KYT — Know Your Transaction
KYT answers: What is the customer actually doing?
It reveals:
Behaviour patterns
Counterparties
Geography risk
Sudden deviations
KYT is the story that actually unfolds.
🔗 Where the Magic Happens: KYC + KYT Together
The real power lies in the comparison.
A transaction becomes suspicious not because it’s big or international.
It becomes suspicious when it doesn’t fit the customer’s story.
📌 Example:
A 19-year-old student, no prior work history, suddenly starts receiving high-value international wires.
👉 TM only spots it.
👉 KYC explains why it’s abnormal.
👉 KYT proves the deviation.
This is how investigators find real risk instead of drowning in false positives.
✨ KYC paints the picture. KYT brings it to life. Together, they make Transaction Monitoring smarter — not harder.
#tm#aml#kyc#kyt#monitoring
Farhan Zaheer • Banking Services Manager|KYC/CDD/EDD/UBO Onboarding
Well said KYC is the prime pillar of compliance it identifies the customer; KYT validates the story through their transactions & behaviour.
Anisha BijuAuthor • Finance & Compliance Professional | IIBF Certification
Farhan Zaheer Exactly — KYC builds the profile, and KYT confirms whether activity stays consistent with it. The synergy between the two is what drives effective AML outcomes.
