The Role of Information Technology in Ensuring Transparency of Financial Transactions and Combating Money Laundering

Abstract

This article discusses the role of information technology in ensuring transparency of financial transactions and combating money laundering. As information technology develops, not only the means of combating financial crimes are being improved, but also various schemes for circumventing existing information systems. Since traditional anti-money laundering strategies do not quite correspond to these changes, there is a need to introduce modern information technologies aimed at creating transparency of financial transactions and combating money laundering. To begin with, the author analyzed the financial crime index and found that the greatest risks are observed in regions with unstable political and economic conditions. Next, the author analyzes the main types of financial fraud and determines that card fraud accounts for the largest share of them. It is determined that, according to global analysts, the amount of losses from money laundering ranges from 2% to 5% of global GDP. The author has ranked countries by the level of the Money Laundering Index and determined that the risks of money laundering are most pronounced in countries with unstable governments, high levels of corruption and weak financial regulation, while the lowest risk is in countries with strong institutions and transparent financial systems. The author also analyzes the main types of technologies used by global banks in the context of combating money laundering. The author shows that joint collaboration between bank employees and information technology will prevent not only money laundering cases, but also reputational risks that a bank may receive from its customers. The final part of the study analyses the use of information technology by Ukrainian banks and examines the statistics of financial monitoring. It is shown that in Ukraine there is an insufficient number of banks implementing information technologies to combat money laundering, which has led to the detection of a significant amount of criminal funds.