The Role of Regulatory Technology & Bankers to Prevent Money Laundering in Bank (original) (raw)
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Accounting and Finance Research, 2023
Money laundering poses a significant challenge globally, involving using cash to conceal the origins of funds. With the rise of digitalisation and the adoption of financial technology (FinTech), the financial sector has been compelled to adapt to these changes. The COVID-19 pandemic has further accelerated the use of FinTech services, including digital banking, to address social distancing concerns and enhance customer convenience. Despite having an index of risk considered moderate for money laundering, Indonesia continues to be a destination for these types of illegal activities. Anti-money laundering (AML) and counter-terrorism financing (CFT) programs must be implemented, especially in all financial service providers that Bank Indonesia oversees. Additionally, the internal audit function is crucial in identifying money-laundering activities within banks. However, there needs to be more research regarding integrating RegTech and evaluating internal audit functions in preventing money laundering in Indonesian banks. This paper aims to address this gap by examining the benefits of RegTech solutions and the role of internal audit functions in preventing money laundering. The findings can be used to enhance regulations and implement effective measurement to combat money laundering and illicit activitivities. Furthermore, the study highlights the importance of Indonesia's membership in the Financial Action Task Force (FATF) to strengthen the country's AML framework and contribute to global policies on AML and countering the financing of terrorism.
Heliyon, 2020
This study aims to illustrate the impact of adopting Regulatory technology (RegTech) innovations in banks on money laundering prevention effectiveness using Bahrain as a case study. Bahrain has strived to position itself as the banking center of the Arabian Gulf, hence the results of this novel research are informative of the practices in the region. The primary data for this study was collected through a survey instrument distributed to 100 bankers working in Bahrain with expertise in compliance. The results of multivariate analysis indicate that transactions monitoring through RegTech and cost-and time-saving aspects of RegTech, drive money laundering prevention effectiveness to a highly statistically significant extent. However, electronic know your customer (KYC) technologies are insignificant as drivers. This research not only sheds light on the efficacy of RegTech but also raises general awareness concerning the adoption and integration of RegTech platforms for fighting money laundering. In particular, the findings provide specific insights about the deployment of RegTech capabilities in banks in regional banking centers of modest scale.
Law Enforcement of Money Laundering in Banking
Scientific Research Journal, 2020
This study aims to identify the mechanism of money laundering in banking institutions in Indonesia. This type of research is a legal research of the juridical-sociological approach. The location of the study was conducted at several banks including Bank Niaga, Bank Cental Bank Asia and Bank Indonesia (BI) in Makassar City. Legal materials used to solve problems as formulated in this legal research are sourced from primary, secondary and tertiary legal materials. Data obtained through data collection in the form of interviews and literature study. The data obtained both primary and secondary data, were analyzed qualitatively. The results showed that the mechanism of eradicating money laundering at banking institutions in Indonesia has been regulated by Undang-Undang Nomor 8 Tahun 2010 concerning Prevention and Eradication of Money Laundering. Money laundering regulations are considered effective in anticipating and eradicating money laundering by tracking the flow of funds in banking institutions related to disclosure of crimes seized at the same time also criminalizing anyone who receives a flow of crime. This authority is exercised by the PPATK (Financial Transaction Reports and Analysis Center), which has the task of preventing and combating money laundering.
The Effectiveness of Anti Money Laundering Regulations of Malaysian Commercial Banks
International Journal of Academic Research in Accounting, Finance and Management Sciences
Money laundering has now been designated as a global crime, requiring the development of global strategies and policies to combat it. As a result, global courts should be established to hear all money-laundering cases and make informed decisions on punishments and penalties. The objective of this research is to assess the effectiveness of anti-money laundering (AML) regulations in Malaysian commercial banks. Customer record-keeping, suspicious transaction reporting, and employee training are three predictors that have been expected to affect money-laundering activities. Simple random sampling was used to pick the respondents from bank employees in the Klang Valley area. A total of 94 (94%) questionnaires were returned, and the data were analysed using descriptive and multiple regression analysis. The results indicating that customer record keeping, suspicious transaction reporting, and employee training have a significant relationship on money laundering prevention. Money laundering activities could be curbed by concentrating on customer record keeping, suspicious transaction reporting, and employee training. The findings show how the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 (AMLATFPUAA) has become a vital gap in combating money laundering. Similar research may be performed in other environments with different money laundering laws and regulations.
Combating Money Laundering in Malaysia: Current Practice, Challenges and Suggestions
Asian Journal of Accounting and Governance
Money laundering is a global threat to financial institutions especially the banking industry since it may weaken and expose the institutions to serious risks such as operational, legal and reputational risks. Against this background, the objectives of the study are to analyse the current practice on the prevention of money laundering in selected banks in Malaysia, to investigate the barriers to the implementation of effective Anti-Money Laundering (AML) regulations and to identify the ways to improve the implementation of AML in Malaysia. The study was conducted using qualitative method via interviews with 6 respondents from 6 Islamic & Conventional banks in Malaysia. The preliminary findings showed that the banking institutions' current practice is fully complying with AML regulations under the AMLA 2001. The findings also demonstrated that the barriers to effective implementation of AML regulations are in line with those of previous study, which are lack of expert staff as the top factor together with an additional factor, which is lack of customers' education and awareness on money laundering. Hence, to improve the implementation of AML in Malaysia, this study suggested to firstly strengthen the collaboration with government and relevant authorities to ensure strong enforcement action is taken against the criminals. Secondly, collaboration of BNM with banks and local media to increase public awareness and education on financial crime. Thirdly, to invest on employee training, upgrading system management as well as sufficient resources in compliance unit and finally to intensify the "Three Lines of Defence" in Bank Risk Management.
Determinants of Anti-Money Laundering Program Effectiveness among Banks
International Journal of Management and Sustainability, 2022
This study aims to examine the factors influencing the effectiveness of Anti-Money Laundering (AML) programs among bank employees, specifically the three factors of staff expertise, IT infrastructure, and rules and regulations. One hundred and fifty-two AML analysts participated in the questionnaire survey. The results show that staff expertise and rules and regulations have a significant positive influence on the effectiveness of an AML program while, conversely, IT infrastructure has a significant negative influence on an AML program in a company. The findings in this study indicate that banks may need to take strategic and proactive measures or policies to increase their staff’s knowledge and understanding of their Anti-Money Laundering/ Counter Financing of Terrorism (AML/CFT) policies and procedures. The measures may include regularly reviewing and updating existing policies and procedures. Banks may also need to review their strategy in adapting newer technology related to AML...
Combating Money Laundering In The Banking Industry: Malaysian Experience
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Money laundering has been described by many as the lifeblood of crime and is a major threat to the economic and social well-being of societies. It has been recognized that the banking system has long been the central element of money laundering. This is in part due to the complexity and confidentiality of the banking system itself. It is generally accepted that effective anti-money laundering (AML) measures adopted by banks will make it tougher for criminals to get their "dirty money" into the financial system. In fact, for law enforcement agencies, banks are considered to be an important source of valuable information for the detection of money laundering. However, from the banks- perspective, the main reason for their existence is to make as much profits as possible. Hence their cultural and commercial interests are totally distinct from that of the law enforcement authorities. Undoubtedly, AML laws create a major dilemma for banks as they produce a significant shift in ...
The effect of the banking supervision on anti-money laundering
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This article's goal is to investigate the connection between banking supervision (BakSup) and anti-money laundering (AnMeyLg). The study's hypothesized model was examined using a survey questionnaire research methodology. The Central Bank of Sudan and the compliance departments of Sudanese banks provided the information. Just 247 valid surveys were received out of a total distribution of 450 questionnaires. The partial least squares method for structural equation modeling was applied. The statistical findings supported the impact of banking supervision on anti-money laundering. In-depth discussions of the study's specifics and consequences were included at various points. There are several real-world applications of the findings of this study. Management can use the findings to guide their decisions on whether or not to establish anti-money laundering procedures in their banking firms. Banking supervision may provide managers with effective anti-money laundering strategi...
Diponegoro Law Review, 2022
The development of the Financial Technology (FinTech) Industry in Indonesia is very rapid. Financial Technology (FinTech) can generally be defined as an industry that combines technology and financial features as its business model. One of the advantages FinTech business is the speed and convenience for parties to conduct transactions. The speed and simplicity of transactions in the FinTech business are due to the use of technology in the financial services provided. Furthermore, the FinTech industry facilitates parties to conduct non-face-to-face transactions. The advantages offered by the FinTech industry raise concerns that this business could be used by criminals to commit money laundering crimes. This research tries to see the vital role of using Know Your Customer (KYC) customer principles which are carried out electronically to be applicable in preventing FinTech businesses from being used as a means of committing money laundering crimes.
THE DEVELOPMENT OF MONEY LAUNDERING KNOWLEDGE IN RELATION TO THE ELECTRONIC MONEY
2022
According to the United Nations Office on Drugs and Crime (UNODC) forecast, the amount of money that has been laundered globally amounts to 2- 5% of the global GDP. The process of money laundering has changed over the time and the use of electronic money has increased over the years (Madinger, 2012). Previous research has shown that the arrival of electronic money attracts many people to find other methods of money laundering using electronic payment (Quan & Long, 2018). The Financial Task Force has shown how vulnerable commercial websites and internet payment systems are, but since electronic money is still in its infancy the development needs be a limitation to prevent money laundering. Therefore, this paper will show how electronic money is used in money laundering in Indonesia. The method that will be used is systematic review, the journal that will be reviewed is from 2015 to 2022. The result shows that electronic money do have a roles in money laundering especially in placement stage, and Indonesia seems to still have not find the right code to stop money laundering in digital era.