Transaction Monitoring (TM) System as a Tool for Combating Money Laundering and Financial Terrorism in the United States Financial Industry: A Literature Review Perspective

Authors

  • Rotimi Adetayo Adedokun
  • Omolola Jegede
  • Folashade Bidemi Agboola

DOI:

https://doi.org/10.59573/emsj.8(1).2024.8

Keywords:

Transaction Monitoring, Anti-money Laundering, Anti-Terrorism Financing, Counter Terrorism Financing, United States, Canada, Financial Intelligence Unit, Compliance, Regulators

Abstract

This study examines the concept of transaction monitoring (TM) system and the necessity for it to be strictly and diligently embraced in the United States financial industry as an antidote for money laundering and financial terrorism. The methodology adopted in the study is based on the desktop research methodology by carrying out reviews of the selected existing literature on the issue of transaction monitoring. The reviews discovered that TM remains an effective tool towards combating money laundering, financial terrorism and other related crimes in the United States financial sector since criminals are not shackled by data privacy, international boundaries and transaction monitoring. It is therefore recommended that all the compliance professionals should play important roles in helping to reduce human suffering and combat these criminal activities. Firms must also collect and analyze large amounts of data about their customers in order to be able to spot potential money laundering and financial terrorism activities in the United States financial industry on a timely and accurate manner.

References

Bostel, A. (2021). Building better transaction monitoring for anti-money laundering. Journal of Financial Compliance, 4(4), 313-335.

Comply Advantage (2023). AML Transaction Monitoring Best Practices, State of Financial Crime Report. Originally published 29 May 2020, updated 15 February 2023.

Gerlings, J., & Constantiou, I. (2022). Machine Learning in Transaction Monitoring: The Prospect of xAI. arXiv preprint arXiv:2210.07648.

Larin, D., & Popova, E. (2016). American experience in the implementation of AML/CFT system. In SHS Web of Conferences (Vol. 28, p. 01131). EDP Sciences.

Liepa, D. (2017). The need for proper transaction monitoring in the trust service provider companies in the Netherlands. Baltic Journal of Law, 2, 4-9.

Rani, M. I. A., Zolkaflil, S., & Nazri, S. N. F. S. M. (2022). The money mule red flags in anti-money laundering transaction monitoring investigation. International Journal of Business and Economy, 4(1), 150-163.

Simpson, A. (2018). The role of transaction monitoring in ongoing monitoring: AML compliance programmes in Canada. Journal of Financial Compliance, 2(2), 165-175.

Sundarakani, S., & Ramasamy, M. (2013). Consequences of Money Laundering in the Banking Sector. Sains Humanika, 64(2). https://doi.org/10.11113/sh.v64n2.46

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Published

2024-02-12

Issue

Vol. 8 No. 1 (2024)

Section

Articles

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