The Effect Of First Line Defence Officers On Money Laundering Risks Prevention In Financial Institutions In Malaysia

Authors

  • Norareena Zul, Norazida Mohamed, Erlane K Ghani

Abstract

Customer due diligence is a process of identification high risk customer which involve investigation and gathering of customer’s information for further assessments of customers profile to categorize customers according the type of risks. This study specifically targeted as niche group of first-line defence officers who are responsible to carry out effective customer due diligence procedure to detect and prevent financial institutions residing in Malaysia from money laundering risks. Though latest financial systems can identify the red flags of unusual activities or suspicious transactions, human intervention is still required for decision making processes. Thus, the quality of customer due diligence perform is vital to secure the financial institutions from vehicle of crimes for money laundering proceed. Hence, this study focuses on the factors affecting the competency of first-line defence officers to perform effective customer due diligence. Three contributing factors are examined namely, the first-line defence officers’ experience, education and training provided. This study shows that all the factors examined in this study influence the competency of first-line defence officers to perform effective customer due diligence. The findings suggest that the three factors studied influence the competency of first-line defence officers to perform customer due diligence procedure, thus strengthen the prevention of money laundering risks in financial institutions residing in Malaysia.

Published

2020-11-01

Issue

Section

Articles