What is the purpose of a Suspicious Activity Report (SAR)?

The purpose of a Suspicious Activity Report (SAR) is to identify and report activity that may indicate potential fraud or illegal conduct. Financial institutions are required to file SARs with the appropriate authorities when they detect transactions or behaviors that raise suspicions of criminal activity, such as money laundering, fraud, or terrorist financing. The submission of a SAR helps regulatory and law enforcement agencies monitor and investigate suspicious patterns or trends in financial transactions, ultimately contributing to the prevention of crime and the protection of the financial system.

In this context, other options do not serve this purpose. Regular account transactions do not need to be reported unless they raise concerns about legitimacy. Similarly, outlining a financial institution’s transaction history is not relevant to identifying suspicious activities, nor does providing customer feedback relate to monitoring for fraud or illegal activities. Thus, focusing on reporting identified or suspected fraudulent activities aligns directly with the primary function of SARs in the financial ecosystem.