BA007 · Correspondent Banking

Cash Intensive Activity

A cash-intensive business is a legitimate cover for laundering physical cash: cash & carry wholesalers, currency exchange houses, laundromats, and similar operators that plausibly handle real cash every day. The tell is not the presence of cash — it is cash disproportionate to the business's own declared profile, layered with the tells that separate genuine trade volume from placement.

The finding lives in how far the cash ratio runs above the business's own peer-segment norm, how far the cash actually deposited exceeds the volume the business declared when the account was profiled, how suspiciously even the deposit rhythm is (real retail cash is noisy; fabricated cash is not), and how much of the deposited cash did not originate with the business itself.

Risk indicators

Cash Ratio

• Cash share of turnover running multiples of the business's own peer-segment norm
• Cash-to-turnover ratio inconsistent with the declared business type

Profile Excess

• Actual cash deposited materially exceeding the volume declared at KYC onboarding
• No plausible business explanation for the growth in cash handled

Deposit Regularity

• Deposits landing with an unnaturally even size and cadence
• Coefficient of variation far below what a genuine retail cash business exhibits

Commingling

• Deposited cash traceable to unrelated third parties, not the business's own sales
• Linked entities or depositors with no plausible commercial relationship to the account

Investigation actions

1. Resolve the business account, its declared peer segment, and its linked entities.
2. Compute the cash ratio (cash deposits / turnover) and scale it against the peer norm.
3. Compute the profile excess ratio (cash deposited / declared annual cash volume).
4. Compute the deposit coefficient of variation across individual deposit sizes.
5. Compute the commingling ratio (third-party deposits / total deposits).
6. Score each of the four components against its band cut-lines.
7. Aggregate the weighted exposure score; escalate at or above the threshold.

Detection logic

1. Resolve the business account, its declared peer segment, and its linked entities. 2. Compute the cash ratio (cash deposits / turnover) and scale it against the peer norm. 3. Compute the profile excess ratio (cash deposited / declared annual cash volume). 4. Compute the deposit coefficient of variation across individual deposit sizes. 5. Compute the commingling ratio (third-party deposits / total deposits). 6. Score each of the four components against its band cut-lines. 7. Aggregate the weighted exposure score; escalate at or above the threshold.

Related typologies

Curated from fc-06-correspondent-banking-analytics-toolkit/typologies/BA007_Cash_Intensive_Activity.md