In the fight against money laundering : how Swiss banks can counter the rise of money laundering networks
SONAR|HES-SO
- Behluli, Endrita
- Godinet, Sylvain (Degree supervisor)
- Genève : Haute école de gestion de Genève
64 p.
Bachelor of Sciences HES in International Business Management: Haute école de gestion de Genève, 2023
English
In recent years, there has been a notable increase in money laundering cases associated with various predicate offenses, both at the national and international levels. Notably, the annual reports from the Money Laundering Reporting Office Switzerland (MROS) and other Financial Intelligence Units (FIUs), highlight the significance of fraud as a predicate offense in the reported suspicious activities. As a consequence, this bachelor thesis focuses on money laundering with fraud as a predicate offense.
The advent of online banking has transformed the process of opening bank accounts, granting customers the convenience of bypassing traditional in-person visits to bank branches. However, this convenience has also attracted the attention of cybercriminals who exploit vulnerabilities in the system and use various methods coercing victims into transferring funds and even becoming unwitting money mules. Detecting and combating these illicit activities is crucial in countering money laundering, with banks playing a crucial role in this. Nevertheless, banks face significant challenges in identifying fraudulent patterns due to the massive volume of transactions processed within their systems, whereby traditional monitoring methods often struggle to keep up.
It is important to acknowledge that there are some inherent limitations within this study. Firstly, the scope of this project does not encompass all types of banks, and therefore, the recommendations provided may not be universally applicable to different banking activities and customer segments. Consequently, the focus is primarily on retail and neo banks, which are increasingly experiencing an increase in the number of fraud cases. Secondly, the perspectives of key stakeholders such as fraudsters themselves or the victims of fraudulent activities were not included in this study. While their viewpoints could offer valuable insights, incorporating them would deviate from the central focus of this thesis.
Through comprehensive analysis and insights garnered from interviews with relevant stakeholders, this study has identified effective strategies that banks can adopt to enhance their ability to detect and prevent money laundering more efficiently. However, an accurate assessment of risk costs relies on various factors such as a bank's size, employee count, risk exposure, and risk appetite. Yet it is worth noting that certain tasks, which traditionally required time-consuming manual work, can be swiftly accomplished by advanced systems. Although such systems require significant investments, in the long run, they offer a return on equity (ROE) that cannot be achieved with human labor.
The advent of online banking has transformed the process of opening bank accounts, granting customers the convenience of bypassing traditional in-person visits to bank branches. However, this convenience has also attracted the attention of cybercriminals who exploit vulnerabilities in the system and use various methods coercing victims into transferring funds and even becoming unwitting money mules. Detecting and combating these illicit activities is crucial in countering money laundering, with banks playing a crucial role in this. Nevertheless, banks face significant challenges in identifying fraudulent patterns due to the massive volume of transactions processed within their systems, whereby traditional monitoring methods often struggle to keep up.
It is important to acknowledge that there are some inherent limitations within this study. Firstly, the scope of this project does not encompass all types of banks, and therefore, the recommendations provided may not be universally applicable to different banking activities and customer segments. Consequently, the focus is primarily on retail and neo banks, which are increasingly experiencing an increase in the number of fraud cases. Secondly, the perspectives of key stakeholders such as fraudsters themselves or the victims of fraudulent activities were not included in this study. While their viewpoints could offer valuable insights, incorporating them would deviate from the central focus of this thesis.
Through comprehensive analysis and insights garnered from interviews with relevant stakeholders, this study has identified effective strategies that banks can adopt to enhance their ability to detect and prevent money laundering more efficiently. However, an accurate assessment of risk costs relies on various factors such as a bank's size, employee count, risk exposure, and risk appetite. Yet it is worth noting that certain tasks, which traditionally required time-consuming manual work, can be swiftly accomplished by advanced systems. Although such systems require significant investments, in the long run, they offer a return on equity (ROE) that cannot be achieved with human labor.
- Language
-
- English
- Classification
- Economics
- Notes
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- Haute école de gestion Genève
- International Business Management
- hesso:hegge
- Persistent URL
- https://sonar.ch/global/documents/327555
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