BANKING IN DIGITAL AGE: EFFICIENCY OF АNTI-MONEY LAUNDERING SYSTEM

• Published in: Fìnansovo-kreditna dìâlʹnìstʹ: problemi teorìì̈ ta praktiki (Online) Vol. 2; no. 37; pp. 4 - 13
• Main Authors: Lieonov, S., Vasilyeva, T., Mynenko, S., Dotsenko, T.
• Format: Journal Article
• Language: English
• Published: FINTECH Alliance LLC 30-04-2021
• Subjects: bank; countering the legalization of criminal proceeds; the Cobb-Douglas function; the digitalization of the economy; the effectiveness of combating the legalization of criminal proceeds; the utility function of Stone-Geary
• ISSN: 2306-4994; 2310-8770
• DOI: 10.18371/fcaptp.v2i37.229678

The article is devoted to the problems of the development of a system for combating the legalization of income obtained illegally in the context of digitalization of banking activities. The concept of the effectiveness of the anti-money laundering system was considered. The expediency of using the utility approach for modeling the effectiveness of the system for combating money laundering has been determined. The indicator of the effectiveness of the system of combating money laundering was chosen as the share of indictments sent to the court in the total number of criminal offenses for which pre-trial investigation was carried out in the corresponding period. The first alternative of choice — the focus on the development of identifying suspicious financial transactions is characterized by the indicator Share of criminal offenses for which pre-trial investigation was carried out per one transaction report submitted to the State Financial Monitoring Service. The second alternative of choice — the development of innovative technologies, is characterized by the indicator of the Level of digitalization of the economy. The input data are the indicators on the crime rate in Ukraine, the work of the pre-trial investigation bodies, obtained from the State Financial Monitoring Service of Ukraine, the General Prosecutor's Office of Ukraine and the State Statistics Service of Ukraine, suspicious financial transactions and the number of Internet subscribers. On the basis of the calculated autocorrelation coefficients of zero differences and determination of their statistical significance, a nonlinear function of the relationship between mictoramas was selected. Using the Stone-Geary utility function, which for the selected input data took the form of a Cobb-Douglas power function, the degree of response of alternative approaches to improving the effectiveness of the system of combating criminal proceeds was determined. The degree of digitalization of the economy has a high level of elasticity. Therefore, to increase the effectiveness of the system of combating money laundering, it is necessary to develop innovative information technologies in the field of FinTech.
Keywords: bank, countering the legalization of criminal proceeds, the utility function of Stone-Geary, the Cobb-Douglas function, the effectiveness of combating the legalization of criminal proceeds, the digitalization of the economy.
JEL Classification C49, O17, O33, G21, G14
Formulas: 4; fig.: 5; tabl.: 0; bibl.: 32.