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Processes and Technologies for Identifying Illegal Financial Operations

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  • Josef Budik
  • Otakar Schlossberger

Abstract

The aim of the paper is to discuss law requirements and computer technology related to the processes carried out at identifying clients of banks and other financial institutions. Customer identification is an essential element of an effective customer due diligence programme which banks need to put in place to guard against reputational, operational, legal and other risks. There are mentioned in the paper the law requires that identification must be carried out inside any financial institution which negotiates the new account with the client. The paper describes several approaches to identification. Various scientific and research results are available in printed information. It shows that the illegal operations of clients in these days usually identify bank employees. Communication technologies and computer equipment however has developed so much, and therefore computers could play a new role in money laundering. Illegal operations could currently be detected by a computer. Rapid development of banking technology has changed the way banking activities are dealt with. In conclusion, the present text identifies some problems that lie ahead of financial market in connection with a huge flow of money from black market economies. The paper has been prepared within the project "Current trends in development of financial markets", supported by the Institutional support for long-term strategic development of research organization University of Finance and Administration in 2016.

Suggested Citation

  • Josef Budik & Otakar Schlossberger, 2015. "Processes and Technologies for Identifying Illegal Financial Operations," International Journal of Economics & Business Administration (IJEBA), International Journal of Economics & Business Administration (IJEBA), vol. 0(2), pages 22-31.
    • Handle: RePEc:ers:ijebaa:v:iii:y:2015:i:2:p:22-31
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    File URL: http://www.ersj.eu/repec/ers/pijeba/15_2_p2.pdf
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    References listed on IDEAS

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    1. Eleftherios Thalassinos & Konstantinos Liapis & John Thalassinos, 2014. "The Role of the Rating Companies in the Recent Financial Crisis in the Balkan and Black Sea Area," Contributions to Economics, in: Anastasios Karasavvoglou & Persefoni Polychronidou (ed.), Economic Crisis in Europe and the Balkans, edition 127, pages 79-115, Springer.
    2. Eleftherios I. Thalassinos & Bozhana Venediktova & Daniela Staneva-Petkova & Vicky Zampeta, 2013. "Way of Banking Development Abroad: Branches or Subsidiaries," International Journal of Economics & Business Administration (IJEBA), International Journal of Economics & Business Administration (IJEBA), vol. 0(3), pages 69-78.
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    Cited by:

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    4. E.A. Ivanova & M.M. Mackay & T.K. Platonova & N.V. Elagina, 2017. "Theoretical Basis for Composition of Economic Strategy for Industry Development," European Research Studies Journal, European Research Studies Journal, vol. 0(1), pages 246-256.
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    More about this item

    Keywords

    crime; illegal behavior; banks; checking; risk;
    All these keywords.

    JEL classification:

    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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