Escalation procedures are formal, documented protocols that outline how and when an issue, alert or risk must be escalated within an organization. These procedures define the steps to be followed, the roles responsible for reviewing escalated cases and the timeline in which escalations must be addressed.

Escalation procedures are especially important within Know Your Customer (KYC) and Anti-Money Laundering (AML) programs - particularly when dealing with red flags, politically exposed persons (PEPs), sanctions matches or suspicious activity that may require filing a Suspicious Activity Report (SAR). Well-structured escalation procedures support consistent decision-making, reduce operational risk and ensure compliance with regulatory obligations by providing a clear framework for handling potential threats or irregularities.