Within compliance, risk management / risk mitigation and Know Your Customer (KYC) processes, escalation refers to the act of raising a concern, issue or alert to a higher level of authority or review.

This typically occurs when a potential risk, suspicious activity or unresolved discrepancy is identified during Due Diligence (DD), screening, monitoring or transaction analysis. The purpose of escalation is to ensure that more experienced or senior personnel can assess the situation and determine whether further investigation, action or reporting is necessary. Escalation helps organizations manage risk more effectively by ensuring that high-risk or ambiguous cases receive the appropriate level of scrutiny.