Definition:
A Suspicious Activity Report (SAR) is a confidential report submitted by financial institutions to regulators when they detect potential money laundering, fraud, or other suspicious financial activities.

Contextual Explanation:
SARs help law enforcement agencies track and investigate suspicious financial behavior. Unlike Suspicious Transaction Reports (STRs), SARs can be filed based on unusual patterns rather than specific transactions.

Why It Matters:
Filing SARs is a critical part of financial crime prevention. Organizations that fail to submit SARs when required may face regulatory action.

Example:
A fintech company notices a user making multiple rapid transactions just below the reporting threshold. They submit a SAR to the relevant authority for further review.