From Technology Review…
If there is a lesson from former New York governor Eliot Spitzer’s scandal-driven fall (aside from the most obvious one), it is this: banks are paying attention to even the smallest of your transactions.
For this we can thank modern software, and post-9/11 U.S. government pressure to find evidence of money laundering and terrorist financing. Experts say that all major banks, and even most small ones, are running so-called anti-money-laundering software, which combs through as many as 50 million transactions a day looking for anything out of the ordinary.
In Spitzer’s case, according to newspaper reports, it was three wire transfers amounting to just $5,000 apiece that set alarm bells ringing. It helped that he was a prominent political figure. But even the most mundane activities of ordinary citizens are given the same initial scrutiny.
“All the big banks have these software systems,” says Pete Balint, a cofounder of the Dominion Advisory Group, which helps banks develop strategies for combatting money laundering and fraud. “Depending on their volume, they might have thousands of alerts a month.”