ANTI-MONEY LAUNDERING IN BANKING
ANTI-MONEY LAUNDERING IN BANKING
University of East Anglia
Student Name: Jatin Vaghasiya
Student Id: 100410566
Word Count: 2032
Working Title
TOC o "1-3" h z u Background and Literature Review PAGEREF _Toc130246191 h 3Research Aim and Objectives PAGEREF _Toc130246192 h 5Methodology PAGEREF _Toc130246193 h 5Research Ethics PAGEREF _Toc130246194 h 7Timescale and Resources PAGEREF _Toc130246195 h 8References PAGEREF _Toc130246196 h 9
Background and Literature ReviewResearch Topic
Agca et al. (2021) stated that the banking literature has focused on the linkage between access to financial sources and economic conditions. Apart from that, the impact of bank concentration on the economy is also open to clear discussion. However, in the recent era, the impact of bank concentration on the real economic outcomes due to money laundering has created a high concern regarding as it affected the local economic conditions and financial services. Yeoh (2020) asserted that money laundering activities in the modern banking system surprise most business-based activities in the modern banking system surprise most business people. In this regard, Europes rules against money laundering are mostly contained in various European Union (EU) anti-money laundering directives (AMLD). The European Union passed the first AMLD in 1990 in an effort to safeguard the financial system from being abused for the purpose of financial fraud (Yeoh, 2020). Significant constitutional obligations were regularly updated to reduce the risk of money laundering and terrorist fundraising.
Discuss the key academic theories
According to Machado and Ollaik (2023), the ideology of rational choice theory (RCT) is widely used to money laundering since it demonstrates how the highest degree of organised criminality curtails the broader society process. Apart from that, the rational choice theory accentuates the risk-diverse process that arises since every option is consistently reasonable. According to Zolkaflil et al. (2021), despite different measures and inquiry outcomes that have failed to alleviate it, money laundering has become a global concern. Several measures, such as anti-money laundering legislation, the development of international anti-money trafficking standards, and many more, have been undertaken globally to reduce money laundering offences.
Likewise, Naheem (2020) asserted that agency theory is also applied in the scenario of money laundering as it influences the affected corporate and government decision-making process. The conventional focus of agency theory is primarily on one representative (the bank) and one patron (the client), with the bank contracted and compelled to work on the client's behalf to get the best possible outcome. Apart from that, Ferwerda et al. (2019) claimed that the ideology of agency theory is usually embraced to mandate international norms and coordinate the worldwide effort regarding tax evasion in the banking industry.
Relation of the research with the theory
Zakaria et al. (2022) open that the consequence of money laundering cases in the banking sector has not only dented the world economy but it also affected the operations of the global financial system. Moreover, the money laundering complications have created poorer economic policies and also hampered the legal activities in the five private sectors, infiltrating the financial system and leading towards economic instability. In this regard, the ideology of rational choice theory (RCT) is widely used regarding the examination of money laundering activities along with identifying offenders' perspectives. The rational choice theory mostly determines what options are available and the selection of the preferred one based on the scenario criteria. Apart from that, according to the opinion of Machado and Ollaik (2023), the rational choice theory is widely used in the decision-making process to implement the quality of the anti-money laundering policy along with measuring the effectiveness of the policy towards curbing money laundering activities. In this research, the ideology of RCT will be highly justified as the research is focused towards anti-money-laundering activities in the banking sector. Moreover, based on the findings of Zakaria et al. (2022) RCT also understands the criminological point of view and defines how financial criminals follow an identifiable cost-benefit analysis to receive high efforts and potential rewards.
Isolauri and Ameer (2022) asserted that the ideology of agency theory is also suitable for understanding money laundering activities as it emphasizes cross-border commerce. As per the analyses, it is evident that research on money laundering activities in the banking sector is highly scarce and largely fragmented across various business operations like international banking, finance, and investment and business ethics. Consequently, the ideology of agency theory makes diverse conceptualisations of money laundering in order to highlight the bibliometric specifications. Additionally, Ilma (2022) articulated that agency theory highlights the respective roles of banks and consumers regarding the maintenance of security in banking transactions. In the context of money laundering activities, the banks internal system requires it to be highly maintained with the help of monitoring transactions and information for employees in management. In this research, the ideology of agency theory would be highly justified as it will not only focus on the financial performance due to money laundering but will also emphasize that AML disclosures do not affect the performance of banking sectors.
Research Aim and ObjectivesThe main aim of the research is to explore the significance of the anti-money laundering (AML) scenario in the banking sector. Furthermore, in the context of anti-money-laundering aspirations, this study will investigate different AML legislations and efforts.
Based on the insights gathered from the academic theories some of the objectives that would be attained in this research are listed below-
To comprehend the notion of anti-money laundering operations in the banking industry
To explore various different anti-money laundering initiatives taken by the government to enhance the financial performance
To analyse the consequences experienced by the global banking sector due to money-laundering
The above objectives will focus on the necessity of anti-money laundering prospects in the banking sector. Moreover, from the objectives, the necessity of implementing anti-money laundering initiatives in the banking sector would be also assessed by highlighting the consequences experienced by the global banking sector due to money laundering.
MethodologyMethodology intends to use
In this research, the ideology of interpretivism research philosophy would be adopted in order to generalize the concept of anti-money laundering scenarios in the banking sector. Moreover, to understand the generalised insights, the ideology of the inductive research approach would be followed by the researcher. As the study will focus on the generalized concept henceforth, the qualitative research method would be highly justified. In this regard, the ideology of exploratory research design will be followed in this research as it is mostly associated with the inductive approach and qualitative method. Through the qualitative method, different AML policies of various national banks and international banks will be explored to develop a new theory regarding AML.
Reason for using the methodology
Van der Walt (2020) stated that the interpretivism philosophy mostly focuses towards theoretical orientations, frameworks and epistemological interpretations to understand the pre-theoretical assumptions regarding the research subject. In this research, the ideology of interpretivism philosophy will focus on the development of approaches as well as strategies to idealize anti-money laundering activities. Similarly, Majeed (2019) opined that the inductive approach defines social regularity or networks in social lives. In this regard, the inductive approach will emphasize answering "what" questions regarding anti-money laundering and recognising the demographic and socio-economic characteristics of the banking sector.
Busetto et al. (2020) stated that the qualitative research method mostly analyzes the nature of phenomena based on quality, different manifestations and perspectives. In this research, the qualitative research method would be highly justified as it will focus towards evidence-based money laundering activities. Based on the money laundering activities, the necessity of implementing various AML strategies would be conceptualized. On the other hand, Makri and Neely (2021) asserted that exploratory research design focuses on the qualitative approach and it is highly inductive. Furthermore, exploratory design is mostly based on theory-building studies by using empirical data in order to establish useful theories. Considering this fact, the significant research will use exploratory design in order to develop relevant grounded theories regarding AML.
Setting in which the research is based
In this research, the banking sector will be considered to understand the consequence of money laundering activities. Moreover, with the help of the banking sector, different policies regarding the anti-money laundering of national and international banks will also be assessed. Regarding the banking sector, different case studies of money laundering will also be considered to idealize significant concepts.
Reason for choosing the setting
According to Thommandru and Chakka (2023), the banking sector is regarded as the primary way of laundering large sums of money, and the industry typically has access to both financial procedures and constitutional authority in order to make appropriate judgements. Moreover, tax dodgers and financial terrorists get quick access to financial institutions by eroding general banking compliance. Based on the research of Thommandru and Chakka (2023), the banking sector would be highly suitable in this research to understand the significance of anti-money trafficking rules, as well as the use of new emergent technologies like blockchain, are being used to subvert the money laundering agenda.
Intend to obtain the data
In the context of understanding money laundering scenarios and the necessity of anti-money laundering policies, the secondary qualitative data will be gathered from databases like Google scholar through journals regarding AML and the necessity of AML in financial institutions. Apart from that, as the study will be highly focused on the banking sector, henceforth different money-laundering case examples of different national and international banks will also be considered in this research. Furthermore, different financial platforms and digital currency platforms will also be assessed to understand the significance of anti-money laundering prospects.
Reason for using the data collection method
Chauvette et al. (2019) elucidated that secondary qualitative data focuses on open accessibility and highlights the growing and global trends. Apart from that, the secondary data highlights the necessity of open data to understand the mixed reactions of worldwide researchers regarding a particular research subject. In this context, with the help of secondary qualitative data, necessary insights regarding anti-money laundering in the banking sector will be assessed. Apart from that, the consistent debate regarding the necessity of anti-money laundering will also be explored with the help of epistemological paradigms.
Assurance for gathering the data
As Google Scholar is an open database, henceforth, the accumulation of data regarding money laundering and anti-money laundering policies of different national and international banks will be accomplished properly. Apart from that, regarding case examples, different open government websites will be properly assessed.
Research EthicsHesse et al. (2019) asserted that research ethics in qualitative data focuses on the insights greater along with understanding its specificity and authenticity. In the context of the secondary data sets, the researcher will focus on meeting the university's ethical standards and making ethical clearance before initiating the data analysis process. Apart from that, as the study will be highly inclined towards a qualitative approach, henceforth, plagiarism could be a vital ethical issue in this research.
Timescale and ResourcesKey activities needed to be undertaken
In order to complete the dissertation, one of the key activities that will be required to undertake is the approval of the research proposal. Regarding the approval of the research proposal, proper methodological paradigms and objectives should be articulated. Furthermore, as the study will be inclined towards the secondary qualitative data approach, henceforth, proper secondary journals and articles should be narrowed down before initiating as well as accomplishing the dissertation.
Each activity is likely to take
Each of the research activities will be accomplished within 6 to 7 days to complete the entire dissertation within the provided university deadline.
Activities need to be completed before others can start
Yes, activities like the selection of research, objectives and research questions will need to be completed before initiating the next tasks. Apart from that, the consideration of suitable methodological paradigms will also be required to be completed to initiate the data analysis process.
Likely dates associated with the completion of activities
Figure 1: Timeline of the research
(Source: Self-Created)
The selection of the data analysis process of research will require 6 days and the time period that has been considered was from 6th March to 13th March 2023. Considering the university deadline, the overall submission of the proposal will be done on 24th March 2023 regarding the getting of approval for initiating the dissertation.
Availability of sufficient resources
Yes, sufficient resources are available for executing the research. As most of the secondary data will be gathered from Google scholar, henceforth, the availability of data regarding anti-money laundering activities in the banking sector would be highly accessible.
ReferencesAgca, S., Slutzky, P. and Zeume, S., 2021. Anti-money laundering enforcement, banks, and the real economy. Available at SSRN 3555123.
Busetto, L., Wick, W. and Gumbinger, C., 2020. How to use and assess qualitative research methods. Neurological Research and practice, 2, pp.1-10.
Chauvette, A., Schick-Makaroff, K. and Molzahn, A.E., 2019. Open data in qualitative research. International Journal of Qualitative Methods, 18, p.1609406918823863.
Ferwerda, J., Deleanu, I.S. and Unger, B., 2019. Strategies to avoid blacklisting: The case of statistics on money laundering. PloS one, 14(6), p.e0218532.
Hesse, A., Glenna, L., Hinrichs, C., Chiles, R. and Sachs, C., 2019. Qualitative research ethics in the big data era. American Behavioral Scientist, 63(5), pp.560-583.
Ilma, M.A., 2022. Bank role in preventing money laundering and cyber security. Technium Soc. Sci. J., 37, p.287.
Isolauri, E.A. and Ameer, I., 2022. Money laundering as a transnational business phenomenon: a systematic review and future agenda. Critical Perspectives on International Business, (ahead-of-print).
Machado, D. and Ollaik, L., 2023. Protection of cultural objects against money laundering: Contributions of rational choice theory 1. In Global Perspectives on Cultural Property Crime (pp. 83-98). Routledge.
Majeed, I., 2019. Understanding positivism in social research: A research paradigm of inductive logic of inquiry. International Journal of Research in Social Sciences, 9(11), pp.118-125.
Makri, C. and Neely, A., 2021. Grounded theory: A guide for exploratory studies in management research. International Journal of Qualitative Methods, 20, p.16094069211013654.
Naheem, M.A., 2020. The agency's dilemma in anti-money laundering regulation. Journal of Money Laundering Control, 23(1), pp.26-37.
Thommandru, A. and Chakka, B., 2023. Recalibrating the Banking Sector with Blockchain Technology for Effective Anti-Money Laundering Compliances by Banks. Sustainable Futures, 5, p.100107.
Van der Walt, J.L., 2020. Interpretivism-constructivism as a research method in the humanities and social sciences-more to it than meets the eye. International Journal of Philosophy and Theology, 8(1), pp.59-68.
Yeoh, P., 2020. Banks vulnerabilities to money laundering activities. Journal of Money Laundering Control, 23(1), pp.122-135.
Zakaria, N.B., Mohamed, N. and Marzukai, N., 2022. Determinant of Compliance Perceptions among Bank Officers towards Anti-Money Laundering.
Zolkaflil, S., Omar, N. and Nazri, S.N.F.S.M., 2021. Factors influencing the outcome of money laundering investigations. In Money Laundering and Terrorism Financing in Global Financial Systems (pp. 128-156). IGI Global.
