High-Quality vs. Low-Quality Suspicious Activity Reports (SAR): What Sets Them Apart?

High-Quality vs. Low-Quality Suspicious Activity Reports (SAR): What Sets Them Apart?

Learn how to differentiate between low- and high-quality Suspicious Activity Reports (SARs) and why quality matters in regulatory compliance.

Suspicious Activity Reports (SARs) are an essential tool in the fight against financial crime. By providing regulators and law enforcement agencies with vital intelligence, SARs help uncover money laundering, terrorist financing, fraud, and other financial crimes. However, the effectiveness of a SAR is only as strong as its quality.

Unfortunately, many compliance teams unknowingly submit low-quality SARs that fail to achieve their intended purpose. This article examines the key differences between low- and high-quality SARs, the risks associated with poor-quality filings, and how compliance professionals can ensure their SARs meet the highest standards.


Why SAR Quality Matters

The primary purpose of a SAR is to provide actionable intelligence to regulators and law enforcement. A high-quality SAR enables investigators to identify criminal networks, track illicit funds, and prevent financial crimes. Conversely, a low-quality SAR may obscure critical information, waste investigators' time, and create reputational and regulatory risks for the reporting institution.

Regulators are increasingly emphasizing the importance of SAR quality. For instance, the Financial Crimes Enforcement Network (FinCEN) has highlighted deficiencies in SAR filings in its periodic advisories, while the Financial Action Task Force (FATF) continues to advocate for more robust reporting standards.


To better understand compliance essentials, check out our guide on 5 Components of an Effective Compliance Program in Canada.


Characteristics of a Low-Quality SAR

Low-quality SARs are often the result of incomplete analysis, poor writing, or failure to adhere to regulatory requirements. Common characteristics of low-quality SARs include:

Vague or Incomplete Narratives

  • Lack of detail about the suspicious activity, such as who, what, when, where, why, and how.
  • Overuse of generic phrases like "unusual activity" without explaining why the activity is suspicious.

Missing or Incorrect Data

  • Omissions in key fields, such as account numbers, dates, and transaction amounts.
  • Incorrect or inconsistent data that may mislead investigators.

Failure to Explain Suspicion

  • Inability to clearly articulate why the activity is unusual or suspicious.
  • Lack of connection between observed behavior and potential predicate offenses (e.g., money laundering or fraud).

Boilerplate Language

  • Using copy-pasted templates that do not reflect the unique circumstances of the activity being reported.

Over-Reporting Without Context

  • Including excessive, irrelevant information that obscures the core issue.

For businesses struggling to meet reporting requirements, learn more about our Effectiveness Review Services to strengthen your compliance program.


Characteristics of a High-Quality SAR

High-quality SARs, on the other hand, are concise, detailed, and actionable. They provide sufficient information to allow investigators to make informed decisions. Key characteristics include:

Comprehensive and Specific Narratives

  • A well-organized narrative answering the who, what, when, where, why, and how of the suspicious activity.
  • Clear explanations of the transactions, behaviors, or patterns that triggered the suspicion.

Accuracy and Completeness

  • All mandatory fields are filled out correctly, including account details, dates, amounts, and identifiers.
  • Data is consistent throughout the SAR, avoiding contradictions or omissions.

Connection to Known Typologies

  • Explicit references to known red flags or typologies (e.g., structuring, layering, or rapid movement of funds).
  • If possible, linking the activity to specific money laundering stages or predicate offenses.

Conciseness with Context

  • Presenting relevant facts in a structured and concise manner, avoiding unnecessary details.
  • Providing sufficient context to understand the activity without overloading the narrative.

Use of Analytical Tools

  • Leveraging transaction monitoring systems, open-source intelligence (OSINT), and other analytical tools to identify patterns and provide context.

How to Tell the Difference Between High- and Low-Quality SARs

Compliance professionals can use the following checklist to evaluate SAR quality:

  • Does the SAR provide a clear narrative? High-quality SARs tell a coherent story of the suspicious activity, while low-quality SARs often leave investigators guessing.
  • Are all fields complete and accurate? Missing or incorrect information is a hallmark of low-quality SARs.
  • Does the SAR include actionable intelligence? High-quality SARs provide insights that investigators can use, such as links to typologies or evidence of coordination between entities.
  • Is the language professional and precise? Avoid vague, generic, or overly technical language.


For additional guidance, consider our CAMLO/MLRO Services, designed to help businesses streamline their reporting processes and improve compliance outcomes.


Risks of Submitting Low-Quality SARs

Filing low-quality SARs can have significant consequences, including:

  • Regulatory Fines and Enforcement Actions
  • Regulators may penalize institutions for systemic deficiencies in SAR filings, such as failing to include sufficient detail or submitting incomplete reports.
  • Wasted Resources
  • Investigators must spend additional time and effort clarifying or following up on low-quality SARs, delaying the investigative process.
  • Reputational Damage
  • Consistently filing poor-quality SARs can erode trust with regulators, partners, and customers.


For startups and SMEs, outsourcing compliance can be a game-changer. Learn more about the Benefits of Outsourcing Compliance.


Best Practices for Producing High-Quality SARs

To ensure compliance teams produce high-quality SARs, institutions should adopt the following best practices:

Invest in Training

Regularly train staff on SAR writing techniques, emerging typologies, and regulatory expectations. Training courses coming soon at AMLI

Use Technology Effectively

Leverage advanced transaction monitoring systems, AI-driven analytics, and case management tools to identify and investigate suspicious activity thoroughly.

Implement Robust Quality Control

Establish a dedicated quality assurance team to review SARs before submission.

Stay Current on Regulatory Trends

Monitor regulatory advisories and industry best practices to ensure SAR narratives address the latest threats and typologies.

Document Your Rationale

Include a clear explanation of why the activity was deemed suspicious, supported by evidence.


For businesses working in the cryptocurrency space, our Token Due Diligence Services provide tailored compliance support.



Conclusion: The Importance of Quality in SAR Filings

The distinction between high- and low-quality SARs lies in the details. By focusing on clarity, accuracy, and relevance, compliance teams can ensure their SARs provide meaningful intelligence to regulators and law enforcement.

At AML Incubator, we help businesses improve their compliance processes, including SAR preparation and quality control. Contact us today to learn how we can assist you in producing high-quality SARs that demonstrate your commitment to regulatory excellence.



Disclaimer: The views and opinions expressed in articles published on this website are solely those of the respective authors and do not necessarily reflect the views of the company or its affiliates. The content is for informational purposes only and should not be considered financial, legal, or investment advice. The whole or part of this content may have been generated, edited, or rewritten using language models.


By Haik Kazarian


AML Incubator. Don't just meet compliance standards - set them.

Contact: Hello@amlincubator.com