Demetis D.S. Technology and Anti-Money Laundering: A Systems Theory and Risk-Based Approach

Edward Elgar Pub, 2010. – 200 p. – ISBN: 1848445563, 9781848445567The ideas behind this book were developed gradually over a number of years. Many individuals have influenced this effort, particularly by sharing their own experiences on anti-money laundering (AML). However, what has undoubtedly taken a much longer time to establish was the connec- tion between anti-money laundering as a pragmatic problem domain and systems theory as a theory that could be used to develop AML research. Even though this book constitutes an academic endeavour in its core, there are indeed important implications for practitioners. Research results from a financial institution that was studied over a period of three years are included in this book. I trust that the analysis of AML operations of the financial institution will be of considerable interest to the reader. This analysis is presented as an in-depth case study and a whole chapter is dedi- cated to this purpose. The influences of information systems on AML, as well as the internal suspicious transaction-reporting regime of the financial institution, yield some interesting results and point to a fascinating com- plexity around AML.List of Figures
List of TablesList of AbbreviationsIntroduction to anti- money launderingThe nature of laundered money
The laundering process
Estimating the money laundering market?
The international fi ght against ML
An overview of some global AML features
The farce of anti- terrorist fi nancing (ATF)
On systems theoryAbout systems theory
Diff erence and distinction
The system
The boundary, the environment et al
Complexity
Self- reference
The case study of Drosia bankAccess to the bank
General comments about the bank
AML within the bank
Examining scenario a) external requests
Examining scenario b) internal initiation of reporting
The POSEIDON information system
The extent and form of asymmetry in STRs
The CHIMERA system: a new automated solution for AML
The Electronic Updates System
The ZEUS profi ling software
Broader comments
5. Systems theory – a theory for AMLThe system of AML
The functional diff erentiation of society and the role of AML
Coding
The code of the AML system
The role of technology in the AML system
AML – ‘islands of reduced complexity’
The technological construction of AML- reality
The system of technology
The risk- based approach and a risk- based data- mining application
Deconstructing risk
On the regenesis of risk
The concept of risk
The 3rd AML Directive and its confusion of risk
Risk representation
The construction of risk- deconstruction
A data- mining application for the risk- based approachEpilogue
Notes