Which of the following is an indicator of suspicious activity in a financial institution?

• A. Clients consistently deposit small amounts of cash
• B. Clients express willingness to provide personal identification
• C. Clients frequently alter transactions before completion
• D. Clients often withdraw cash for legitimate purchases

Answer: (C)

The identification of indicators of suspicious activity in a financial institution is crucial for compliance with anti-money laundering (AML) regulations. Frequent alterations of transactions before completion is a strong indicator of potentially suspicious behavior. This pattern raises red flags as it may suggest that clients are attempting to obscure the true nature or source of the funds involved in these transactions. Changes made to transactions can generate anxiety about their legitimacy, particularly if clients routinely adjust their transaction details without clear reasons. This behavior could indicate an attempt at money laundering or fraud, as it undermines the integrity of the transaction process.

In contrast, consistently depositing small amounts of cash is generally observed in daily banking activities and may not inherently suggest suspicious behavior. Expressing a willingness to provide personal identification is typically a positive sign of compliance and openness, not an indicator of suspicious activity. Lastly, frequently withdrawing cash for legitimate purchases is considered normal behavior, as many customers have valid reasons for withdrawing cash to make everyday transactions.