Use of typologies and risk maps in the system of internal financial monitoring

Abstract

An analysis of the effectiveness of measures in the field of financial monitoring, which showed an increase in crime, fraud, in the field of money laundering, so a proper assessment of the risks of money aundering needs further improvement. The strategy of risk management of the use of financial services for money laundering or terrorist financing should be chosen taking into account the specifics of each specific financial institution: its size, the presence of a branch network, priority areas, etc. Typologies on the use of cash and monetary instruments in illegal activities are considered, as well as signs of such suspicious transactions, which are most characteristic of the Ukrainian financial sector. It is desirable to make greater use of international experience in combating this phenomenon, to create a coordinated systemic mechanism to combat international manifestations of money laundering. Given the need to improve the effectiveness of financial monitoring to prevent money laundering, international organizations recommend a risk-based approach. The current legislation establishes the need to assess the risk of SPFM clients by such criteria as: by type of client, by risk of financial services and by geographical risk and risk by type of priority. The need and importance of establishing the level of risk of legalization of criminal proceeds of SPFM has been identified, as they can both directly conduct financial transactions to legalize illicit proceeds and facilitate their implementation due to intentional actions or insufficient competence of employees responsible for internal financial monitoring. The point method of determining the level of risk of legalization of criminal income of the bank is considered, which has advantages: it gives a sufficiently reliable assessment, combines quantitative and qualitative indicators, is simple, clear and easy to use. It can be used both by the bank to determine the effectiveness of the risk management system of money laundering or to determine the risk of money laundering of a particular financial service, and by the National Bank to determine the frequency of inspections of the bank on financial monitoring.