The effects of individual, contextual and environmental factors on judgment and decision making of anti-money laundering compliance officers / 'Ainul Huda Jamil

Banking institutions and money service businesses (MSBs) are the most vulnerable financial sector to money laundering. Bank Negara Malaysia (BNM) stated the findings of minor to major gaps in the banking institutions' anti-money laundering (AML) compliance programme and risk management activiti...

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Main Author:	Jamil, 'Ainul Huda
Format:	Thesis
Language:	English
Published:	2022
Subjects:	Banking
Online Access:	https://ir.uitm.edu.my/id/eprint/75462/1/75462.pdf
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id	my-uitm-ir.75462
record_format	uketd_dc
institution	Universiti Teknologi MARA
collection	UiTM Institutional Repository
language	English
advisor	Mohd Sanusi, Zuraidah
topic	Banking Banking
spellingShingle	Banking Banking Jamil, 'Ainul Huda The effects of individual, contextual and environmental factors on judgment and decision making of anti-money laundering compliance officers / 'Ainul Huda Jamil
description	Banking institutions and money service businesses (MSBs) are the most vulnerable financial sector to money laundering. Bank Negara Malaysia (BNM) stated the findings of minor to major gaps in the banking institutions' anti-money laundering (AML) compliance programme and risk management activities, emphasizing the quality of suspicious transaction reports in National Risk Assessment (NRA). The compliance officer has the sole discretion to report suspicious transactions to BNM's Financial Intelligence and Enforcement Department (FIED). It denotes that compliance officer's sound judgment and decision-making are critical in the battle against money laundering. This study addresses the above gaps by examining the effects of the compliance officers' individual, contextual and environmental factors at banking institutions and MSBs. Moreover, with the existing scarcity of money laundering related behavioural studies, this study is justified for narrowing the research gaps. This study examines the threecomponent factors that could influence the compliance officers' judgment and decisionmaking in money laundering risk according to behavioural decision theory, Bonner's judgment and decision-making framework, and Diagnostic Cognitive Modelling (DiaCoM) framework. This study utilizes two prongs, a survey, and a between-subject quasi-experimental research design, to present a holistic view of money laundering risk judgment and decision-making. Given the circumstances surrounding money laundering risk, combining these two sub-studies provides robust findings. This study intended to find the impact of individual, contextual and environmental factors on the judgment and decision-making of compliance officers. The data were analysed using Partial Least Squares of Structural Equation Modelling on 101 and 124 cleaned data for Study One and Study Two. In Study One, results of the study suggest that individual characteristic (knowledge sharing) is vital in influencing the performance of money laundering risk judgment directly or indirectly. Study One shows that some correlations between knowledge sharing, and money laundering risk judgment are mediated by contextual characteristics (risk-based approach). However, results show that the environmental component (ethical environment) moderates the link between knowledge sharing and money laundering risk judgment. Study Two, which experimentally employs the diagnostic cognitive modeling framework (DiaCom) in the case studies, confirms no direct effect of individual factors (technical competency) on money laundering decision-making without prior assessment and judgment. Study Two also provides further evidence that shows the direct effects of contextual factors (customer risk profiling) and moderation effects of environmental factors (law enforcement) on the relationship between customer risk profiling and money laundering risk decisionmaking. Study Two concludes by imposing stricter law enforcement on reporting institutions, their compliance officers will make tougher decision-making on customers with low-risk profiles than when law enforcement is lenient. This study contributes to the current body of knowledge on money laundering risk judgment and decision-making by validating the theoretical foundation's underlying behavioural judgment and decision-making. The originality of the research appears from the Money Laundering Diagnostic Thinking (MoLDiT) Model developed to combine all the three elements of individual, contextual and environmental characteristics towards money laundering risk judgment and decision-making. However, the study has several limitations that should be covered by future research in terms of the population, research techniques, methodology, scope of research and theory.
format	Thesis
qualification_name	Doctor of Philosophy (PhD.)
qualification_level	Doctorate
author	Jamil, 'Ainul Huda
author_facet	Jamil, 'Ainul Huda
author_sort	Jamil, 'Ainul Huda
title	The effects of individual, contextual and environmental factors on judgment and decision making of anti-money laundering compliance officers / 'Ainul Huda Jamil
title_short	The effects of individual, contextual and environmental factors on judgment and decision making of anti-money laundering compliance officers / 'Ainul Huda Jamil
title_full	The effects of individual, contextual and environmental factors on judgment and decision making of anti-money laundering compliance officers / 'Ainul Huda Jamil
title_fullStr	The effects of individual, contextual and environmental factors on judgment and decision making of anti-money laundering compliance officers / 'Ainul Huda Jamil
title_full_unstemmed	The effects of individual, contextual and environmental factors on judgment and decision making of anti-money laundering compliance officers / 'Ainul Huda Jamil
title_sort	effects of individual, contextual and environmental factors on judgment and decision making of anti-money laundering compliance officers / 'ainul huda jamil
granting_institution	Universiti Teknologi MARA (UiTM)
granting_department	Accounting Research Institute (ARI)
publishDate	2022
url	https://ir.uitm.edu.my/id/eprint/75462/1/75462.pdf
_version_	1804889691723399168
spelling	my-uitm-ir.754622024-06-24T04:11:25Z The effects of individual, contextual and environmental factors on judgment and decision making of anti-money laundering compliance officers / 'Ainul Huda Jamil 2022 Jamil, 'Ainul Huda Banking Commercial crimes. Financial crimes. White collar crimes Banking institutions and money service businesses (MSBs) are the most vulnerable financial sector to money laundering. Bank Negara Malaysia (BNM) stated the findings of minor to major gaps in the banking institutions' anti-money laundering (AML) compliance programme and risk management activities, emphasizing the quality of suspicious transaction reports in National Risk Assessment (NRA). The compliance officer has the sole discretion to report suspicious transactions to BNM's Financial Intelligence and Enforcement Department (FIED). It denotes that compliance officer's sound judgment and decision-making are critical in the battle against money laundering. This study addresses the above gaps by examining the effects of the compliance officers' individual, contextual and environmental factors at banking institutions and MSBs. Moreover, with the existing scarcity of money laundering related behavioural studies, this study is justified for narrowing the research gaps. This study examines the threecomponent factors that could influence the compliance officers' judgment and decisionmaking in money laundering risk according to behavioural decision theory, Bonner's judgment and decision-making framework, and Diagnostic Cognitive Modelling (DiaCoM) framework. This study utilizes two prongs, a survey, and a between-subject quasi-experimental research design, to present a holistic view of money laundering risk judgment and decision-making. Given the circumstances surrounding money laundering risk, combining these two sub-studies provides robust findings. This study intended to find the impact of individual, contextual and environmental factors on the judgment and decision-making of compliance officers. The data were analysed using Partial Least Squares of Structural Equation Modelling on 101 and 124 cleaned data for Study One and Study Two. In Study One, results of the study suggest that individual characteristic (knowledge sharing) is vital in influencing the performance of money laundering risk judgment directly or indirectly. Study One shows that some correlations between knowledge sharing, and money laundering risk judgment are mediated by contextual characteristics (risk-based approach). However, results show that the environmental component (ethical environment) moderates the link between knowledge sharing and money laundering risk judgment. Study Two, which experimentally employs the diagnostic cognitive modeling framework (DiaCom) in the case studies, confirms no direct effect of individual factors (technical competency) on money laundering decision-making without prior assessment and judgment. Study Two also provides further evidence that shows the direct effects of contextual factors (customer risk profiling) and moderation effects of environmental factors (law enforcement) on the relationship between customer risk profiling and money laundering risk decisionmaking. Study Two concludes by imposing stricter law enforcement on reporting institutions, their compliance officers will make tougher decision-making on customers with low-risk profiles than when law enforcement is lenient. This study contributes to the current body of knowledge on money laundering risk judgment and decision-making by validating the theoretical foundation's underlying behavioural judgment and decision-making. The originality of the research appears from the Money Laundering Diagnostic Thinking (MoLDiT) Model developed to combine all the three elements of individual, contextual and environmental characteristics towards money laundering risk judgment and decision-making. However, the study has several limitations that should be covered by future research in terms of the population, research techniques, methodology, scope of research and theory. 2022 Thesis https://ir.uitm.edu.my/id/eprint/75462/ https://ir.uitm.edu.my/id/eprint/75462/1/75462.pdf text en public phd doctoral Universiti Teknologi MARA (UiTM) Accounting Research Institute (ARI) Mohd Sanusi, Zuraidah

The effects of individual, contextual and environmental factors on judgment and decision making of anti-money laundering compliance officers / 'Ainul Huda Jamil

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