Is money laundering prevention effective? A perspective from banking institutions

Cátia Tomé / Rita Faria

Keywords

Money laundering; prevention; compliance; banks; interviews.

Abstract

The present article describes the main results of an empirical study conducted with the main purpose of overcoming some of the shortcomings in the existent money laundering literature, by trying to understand the Anti Money Laundering mechanisms in Portuguese banks, particularly regarding prevention procedures and their perceived efficiency. In order to fulfil this objective, a qualitative study was carried out and interviews were conducted with specialists in compliance. The findings showed that mechanisms such as staff training, costumer due diligence and suspicious activity reporting were indeed the ones mentioned the most by participants and depicted as the most essential. These mechanisms allow the acquisition of necessary and sufficient knowledge regarding AML, and the clients. Furthermore, it was possible to conclude that despite the efforts that institutions have made to have a robust prevention system, there are still some challenges to overcome, such as the extensive and complex legislation, the attribution of a risk level to the client, the enormous compliance costs, and the lack of human and technological resources.