Compliance guide
Transaction monitoring in a family office
Updated: · Leutrim Miftaraj, FLIORE · Editorial standards · Other languages: Deutsch · Français · Español
Short answer
Transaction monitoring means continuously comparing the payments and asset movements of a business relationship with its risk profile and clarifying deviations. Anomalies include unusually large amounts, payments to unknown third parties, new high-risk countries or cash. A family office needs clear criteria for this, a documented clarification of every alert and a decision on whether a suspicion must be reported.
Legal framework
In Germany, continuous monitoring of the business relationship, including its transactions, is one of the general due diligence obligations (section 10 para. 1 no. 5 GwG). In Switzerland, Art. 6 AMLA requires the nature and purpose of unusual transactions to be clarified; the AMLO-FINMA specifies how supervised financial intermediaries monitor business relationships. Austria regulates ongoing monitoring in the FM-GwG.
What counts as an anomaly
- Amounts well above the range expected in the profile.
- Payments to or from third parties with no recognisable link to the family or the structure.
- First-time transactions with high-risk countries or sanctioned regions.
- Cash deposits or withdrawals of unusual size.
- Rapid pass-through payments: funds arrive and are forwarded shortly afterwards.
- Splitting larger amounts into many small payments.
What happens with an alert
- Record the alert: transaction, date, amount, counterparty, trigger.
- Compare it with the risk profile and the known background.
- Where needed, ask the family and obtain evidence, such as a purchase agreement or invoice.
- Assess the result: plausible, keep under observation, or suspicion.
- Document the decision with reasons; in case of suspicion, examine whether a report is required.
Manual or system-supported?
A small single family office with few accounts can review statements manually each month, provided criteria and results are recorded. As the number of mandates, banks and currencies grows, systematic analysis becomes unavoidable. For banks and securities firms the AMLO-FINMA requires an IT-supported system; for smaller financial intermediaries it is not mandatory, but in practice it is often needed to monitor without gaps.
Data quality is decisive: bank statements imported in CAMT.053 or MT940 format are more reliable than figures typed in by hand.
Where the reporting obligation begins
Not every alert is a suspicion. The very purpose of the clarification is to find harmless explanations. If a well-founded suspicion remains after the clarification, there is a reporting obligation. Important: the family concerned must not be informed (prohibition of information).
In FLIORE
FLIORE imports account statements in CAMT.053 and MT940 format, detects duplicates and regularly checks transactions and valuations per mandate for outliers. Anomalies appear in the compliance overview and can be closed with a comment and a result.
At a glance
| Aim | Recognise and clarify deviations from the risk profile |
|---|---|
| Basis | Section 10 para. 1 no. 5 GwG (DE), Art. 6 AMLA (CH), FM-GwG (AT) |
| Outcome per alert | Plausible, observe or suspicion – with reasons |
Terms on this page
- High-risk country
- A country with strategic deficiencies in combating money laundering and terrorist financing, in particular according to the FATF lists.
- Ongoing monitoring
- Continuous review of a business relationship and updating of client data throughout its duration.
- Single family office
- An organisation that manages exclusively the wealth and affairs of a single family.
- camt.053
- XML format under ISO 20022 for electronic account statements, replacing the older SWIFT MT940 format.
Frequently asked questions
How often should monitoring take place?
Continuously for high risk, and otherwise at least at fixed intervals, such as monthly. What matters is that anomalies are recognised promptly and not only at the annual review.
Must transactions within the family also be monitored?
Yes. Payments between companies, foundations and family members are usually plausible but should fit the profile. Particularly in multi-level structures, internal pass-through payments sometimes reveal risks that would otherwise remain hidden.
What if the family provides no explanation?
Then the clarification is not complete. Depending on the weight of the anomaly, further measures, a restriction of the relationship or a report must be considered. The decision belongs in the file.
Does the bank's monitoring replace the family office's own?
No. The bank monitors from its own perspective and reports independently. An obliged family office must fulfil its own obligations, all the more so as it often knows more about the background than any single bank.
Sources
- German Money Laundering Act (GwG), section 10 – General due diligence obligations
- Swiss Anti-Money Laundering Act (AMLA/GwG, SR 955.0) – Fedlex
- Austrian Financial Markets Anti-Money Laundering Act (FM-GwG) – Legal Information System (RIS)
- ISO 20022 – message standard (CAMT.053)
This page provides orientation and does not replace legal or tax advice. The cited legal sources in their applicable version are authoritative.
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