Technology and Anti-Money Laundering

Technology and Anti-Money Laundering

A Systems Theory and Risk-Based Approach

Dionysios S. Demetis

This insightful book examines the influence of information systems on anti-money laundering (AML). It builds on systems theory in order to develop a coherent theoretical framework that can be used for AML research.

Chapter 5: Systems Theory – A Theory for AML

Dionysios S. Demetis

Subjects: economics and finance, economic crime and corruption, money and banking, innovation and technology, technology and ict, law - academic, corruption and economic crime, internet and technology law, terrorism and security law, politics and public policy, terrorism and security

Extract

INTRODUCTION In this chapter, the case study findings are discussed and a theoretical treatise is developed. In such a treatise, the anti-money laundering domain is portrayed as a system in the tradition of systems theory. On the basis of empirical data collected from Drosia bank, the role of technology in the AML system is also reflected upon. While this theoretical investigation attempts to establish the academic nature of AML research by moving the domain past ad hoc descriptions, one thing should be made crystal clear from the start; there are considerable implications for practice by dealing with AML in a systems theoretical fashion. This will become more evident in the following chapter where a risk-based application of systems theory for data-mining suspicious transactions is presented. An attempt is made here to synthesize the two distinct poles that have been presented thus far: the core theoretical aspects of systems theory and the more practical aspects that have been outlined for AML through the case study. Some opening remarks will hopefully be of use to the reader by providing a set of clarifications for the analysis itself. The synthesis between AML and systems theory is carried out in two distinct phases. First, some broader comments are provided on how antimoney laundering can be viewed as a system through systems theory. This builds on previous work that attempted for a first time to merge systems theory with AML (Angell and Demetis, 2005). Second, such a description is revisited to provide a novel conceptualization...

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