Financial Monitoring Research Articles

Organizational and economic principles of financial monitoring of national business entities in the context of national security

The article considers the overall landscape and peculiarities of national regulations in the field of financial monitoring, in the retrospect and in the current moment. In particular, the cases of EU as a whole, the Netherlands, the USA, New Zealand and Australia are considered, through the prism of the necessity of compliance with FATF requirements and increased national security threats.

MONEY LAUNDERING DETECTION METHODS IN THE MODERN FIGHT AGAINST CRIME ORGANIZED AND FINANCIAL CORRUPTION

The detection of money laundering is an essential aspect in the modern fight against organized crime and financial corruption. Money laundering is a procedure used by criminals to disguise the legal source of ill-gotten gains and integrate them into the legal economy. In this essay, we will explore the meaning and methodology of money laundering detection. The initial purpose of the money laundering detection methodology is to identify and track suspicious financial transactions and activities of individuals and legal entities. Various techniques and tools are used for this, including financial monitoring of transactions, analysis of financial documents and investigation of ownership and assets. One of the most important aspects of the methodology for detecting money laundering is the analysis of financial transactions. Criminal investigators investigate all transactions of suspicious persons and organizations, to identify transactions that occur in the context of money laundering. Investigating ownership and assets is another critical part of the money laundering detection methodology. This includes checks on the properties and assets of suspicious individuals and organizations. Investigators look into property, patents, company ownership and other assets to prove the links between them and the origin of the money. In conclusion, the methodology for detecting money laundering is complex and very important in the fight against organized crime and financial corruption. Using the analysis of financial transactions, financial reports and documents, as well as the investigation of ownership and assets, criminals try to identify and prosecute money launderers and organizations. Using modern technology and international cooperation, the effectiveness of the methodology can be improved and more serious obstacles can be created for criminals trying to use it to hide illegal capital.

Application of logistic regression to detect an attack on financial monitoring

This paper discusses the application of logistic regression to detect attacks on financial monitoring. Financial organizations are facing increasing security threats, which requires effective methods to detect fraudulent activities. Logistic regression, with its binary classification capability and interpretability of results, is a powerful tool for transaction analysis. The paper also emphasizes the features of this method, including its applicability to large amounts of data and opportunities for model development. Thus, the use of logistic regression is a promising solution for securing financial transactions and identifying potential threats.

Evaluation of financial monitoring systems effectiveness in its relationship to the country's security indicators

Motivation: The motivation for this research work is its potential to identify critical issues with far-reaching implications for economic security, governance and development, and to contribute to more informed decision-making in the area of countering the financing of terrorism. Aim: The purpose of this research paper is to analyse the impact of the FATF (Financial Action Task Force) standards on crime and anti-corruption efforts and the effective implementation of the legal framework in countries. Results: The article examines the relationship between crime, corruption, terrorism and FATF standards in 54 countries. Based on the regression analysis, the influence of crime, terrorism and perception of corruption on the effectiveness and compliance with FATF standards is investigated. The specific coefficients show that the perception of terrorism and corruption have a statistically significant negative and positive impact on the dependent variable, respectively, while the impact of the crime index is not statistically significant. By examining the impact of crime rates and anti-corruption efforts on FATF standards and the effective implementation of legal frameworks in countries, the study aims to provide information that can inform decision-making. Understanding how these factors interact can help to improve anti-money laundering and counter-terrorist financing strategies at both the national and international levels, including the improvement of financial monitoring systems. Understanding the relationship between crime, corruption and terrorism can have practical implications for various stakeholders, including law enforcement, government officials and international organisations. The findings are important for the implementation of effective measures to combat money laundering and terrorist financing, improve governance, security and overall socio-economic stability.

DEEP LEARNING MODEL FOR DETECTING TERROR FINANCING PATTERNS IN FINANCIAL TRANSACTIONS

Terror financing remains a critical threat to global security, with illicit actors continually adapting their methods to evade detection. Traditional financial monitoring systems often struggle to identify the complex and covert patterns associated with terror-related transactions due to their reliance on predefined rules and statistical thresholds. This study introduces advanced deep learning models designed to detect terror financing patterns within vast datasets of financial transactions. We developed and evaluated several neural network architectures, including Convolutional Neural Networks (CNNs) and Long Short-Term Memory networks (LSTMs), to capture both spatial and temporal transaction features. The models were trained and tested on a dataset comprising anonymized financial transactions labeled for suspicious activities related to terror financing. Our deep learning models demonstrated superior performance over conventional machine learning approaches, achieving higher accuracy, precision, and recall in identifying suspicious transactions. Notably, the LSTM-based model excelled in detecting sequential transaction patterns indicative of layering and integration stages commonly used in terror financing. The results underscore the potential of deep learning techniques in enhancing the capabilities of financial institutions and regulatory bodies to combat terror financing. Implementing such models can lead to more proactive and effective monitoring systems that adapt to evolving illicit financing strategies.

Real-time financial monitoring systems: Enhancing risk management through continuous oversight

The rapid evolution of financial technology has introduced complex risks that challenge traditional risk management frameworks, necessitating innovative solutions. This review paper aims to examine and synthesize existing research on real-time financial monitoring systems that use advanced AI and ML technologies to enhance risk management through continuous oversight. The focus includes traditional financial institutions and fintech companies across various regions to address disparities in risk management capabilities. The reviewed studies span five years, from 2018 to 2023, incorporating transactional records, compliance reports, and stakeholder surveys, providing a comprehensive informational and statistical basis. Using a mixed-methods approach that includes qualitative interviews and quantitative data analysis, the literature confirms that real-time monitoring systems significantly improve risk detection accuracy and operational efficiency. Specifically, the studies show a reduction in fraud incidents by 35% and an improvement in credit risk assessment accuracy by 25%. These findings indicate enhanced predictive capabilities and faster response times to emerging threats. The conclusions drawn are relevant for financial institutions, regulators, and policymakers aiming to improve risk management practices and compliance standards. The potential for further application includes broader adoption of real-time systems across the financial sector, ensuring enhanced stability and security in the face of evolving digital threats.

Highlighting the problems of terrorism and its financing in the process of training specialists in financial monitoring

Highlighting the problems of terrorism and its financing in the process of training specialists in financial monitoring

Legal Reform of Criminal Responsibility in Imposing Poverty Sanctions for Perpetrators of Corruption to Restore State Losses

The eradication of corruption is a top priority in efforts to build good governance and transparency in Indonesia. This study explores the implementation of poverty sanctions for corruption offenders as an effective strategy to recover state losses and deter future corruption. It examines the need for legal reform in criminal accountability to ensure fair restitution of state losses and a stronger deterrent effect. By analyzing the current Corruption Law and proposed revisions, the study highlights the potential for strengthening poverty sanction mechanisms in line with principles of justice and human rights. Findings suggest that measures such as asset freezing, prohibition from holding public office, and stringent financial monitoring can significantly contribute to combating corruption. Legal reform is crucial in providing a solid foundation for these efforts, with consistent and transparent implementation of revised regulations being key to success.

An Assessment of Financial Monitoring Systems: Ukrainian and Foreign Experience

An Assessment of Financial Monitoring Systems: Ukrainian and Foreign Experience

The role and importance of financial intelligence in identifying and tracing criminal assets

The paper examines the basic principles of improving efficiency and providing law enforcement officers, as well as authorized bodies, in whose management the seized property is transferred, with instructions on the legal grounds, procedural and tactical features of detection, search and seizure of property. It was determined that financial intelligence is a complex system aimed at detecting operations related to the legalization of proceeds obtained through crime. This system can act as a component of the pre-trial investigation in criminal proceedings related to the research. Asset search activities should include elements of economic and monetary intelligence. It has been established that in Ukraine, the State Financial Monitoring Service, subordinate to the Ministry of Finance of Ukraine, is entrusted with the functions of financial intelligence, which implements the state policy in the field of prevention and countermeasures against the legalization (laundering) of proceeds obtained through crime, the financing of terrorism, and the proliferation of weapons of mass destruction. It is argued that financial intelligence is not a function of the National Agency of Ukraine for detection, search and management of assets obtained from corruption and other crimes. In turn, the DSFM collects, processes and analyzes information on financial transactions subject to mandatory financial monitoring and other transactions related to money laundering. It was investigated that the bodies of foreign countries are similar: Financial Crimes Enforcement Network (FinCEN) - the US financial intelligence agency; Financial Transactions and Reports Analysis Center (FINTRAC), Canada's financial intelligence agency; Zentralstelle für Verdachtsanzeigen – German financial intelligence agency; TRACFIN – financial intelligence unit of the French Republic; The Inland Revenue Service NCIS/ECU is the UK's financial intelligence agency. Having analyzed the relevant legislation of ARMA and the State Financial Monitoring Service, we come to the conclusion that the terms "asset discovery" and "asset search" are explicitly defined at the legislative level only for ARMA. The profile legislation of the State Financial Monitoring Service does not reflect or explain the essence of these terms, however, in the course of implementing measures to prevent and counter the legalization (laundering) of proceeds obtained through crime, the State Financial Monitoring Service conducts financial investigations with the aim of finding information about the assets of questionable origin.

MEASURES OF INFLUENCE FOR VIOLATION OF FINANCIAL MONITORING BY BANKS IN UKRAINE

The research examines the organizational principles of building a system of influence measures for violations of financial monitoring by banks in Ukraine, analysis of fines imposed on banks in the field of financial monitoring, and judicial practice of challenging the applied influence measures for the period from 2018 to 2023. This subject of research was chosen due to the impossibility of effective functioning of the national system of financial monitoring without an effective regulation mechanism. An integral part of market regulation is the implementation of influence measures adequate to the committed violation. The application of influence measures and control over the implementation of corrective actions contribute to the strengthening of the national financial monitoring system. The relevance of the study is determined by the heterogeneity of the functioning of financial monitoring systems in different jurisdictions, the involvement of a wide range of reporting entities in this process, the constant development in the field of financial monitoring due to the digital transformation of the provision of financial services. A wide list of influence measures, which the financial regulator has the right to apply to banks according to Ukrainian legislation, was revealed, including a ban on carrying out certain types of operations, removing management from their positions, classifying the bank as problematic or liquidating the bank. However, in practice, the use of influence measures in the form of written warnings and fines prevailed. The National Bank of Ukraine, as a rule, applied fines in the case of problems of banks with the implementation of measures for customer due diligence and poor banking analysis of financial transactions of clients. The ultimate goal of most schemes, which, according to the National Bank of Ukraine, violated the legislation in the field of financial monitoring, was the conversion of non-cash funds into cash. Banks appealed the decision of the financial regulator only in case of significant fines. At the same time, the courts made different decisions in similar situations, which indicates the absence of a unified position of the judicial system regarding the legality of the application of fines to banks for violations in the field of financial monitoring.

External factors affecting entrepreneurial financial governance strategies of the technical universities in Ghana

The study examined important external elements that have an impact on the technical universities (TUs) in Ghana's entrepreneurial financial governance methods. It highlights the difficulties TUs have managing their finances and the critical role that entrepreneurial finance plays in overcoming these financial limitations. A questionnaire was used by respondents as the data gathering tool in the researcher's quantitative investigation. Purposive sampling was utilised in the study to choose the 160 respondents that participated. According to the study, external environmental factors like political and economic factors, regulatory boundaries set by the state, competition between TUs, insufficient budgetary allocation, inefficient financial monitoring systems, and a lack of dynamic capabilities all have a significant impact on entrepreneurial financial governance strategies. According to the study, technical universities (TUs) in Ghana can increase revenue production, augment government financing, and satisfy their objective of offering high-quality education by applying creative initiatives and improving financial governance processes. This study offers policymakers and key stakeholders in the education sector useful insights to improve the financial sustainability and performance of Technical Universities (TUs) in Ghana. It does this by doing a thorough examination of the external environment and its impact on financial governance initiatives. Through an analysis of the effects of political and economic variables, insufficient budgetary provisions, and inadequate financial monitoring frameworks, this research highlights the imperative for Technical Universities in Ghana to give special consideration to these external elements

The Role of Monitoring and Evaluation and Project Implementation Management System for Non-Profit Project Performance in Developing Countries

Abstract This study examines the relationship between monitoring and evaluation (M&E), project implementation management system (PIMS) for financial monitoring, and project performance within the framework of the resource-based view (RBV), dynamic capabilities, and knowledge management theory. It focuses on non-profit projects in a developing context, particularly in countries such as Bosnia and Herzegovina (BiH). Developmental assistance and non-profit projects have an important role to play in the economic performance of developing countries. The research highlights the significance of understanding factors influencing project performance in non-profit projects in developing countries such as BiH. The findings indicate that both M&E and PIMS for financial monitoring significantly influence three key knowledge management processes - knowledge internalization, knowledge accumulation, and knowledge transfer and integration, which in turn positively influence project performance. The study underscores the importance of synergy between M&E, PIMS, and knowledge management for enhancing project performance, offering valuable insights for policymakers, donors, the international community, and academia.

Administrative and legal status of the state service of financial monitoring as a subdivision of financial intelligence

The activity of the State Financial Monitoring Service of Ukraine as a financial intelligence unit is aimed at protecting the national security of the state by initiating and ensuring the conduct of financial investigations related to the laundering of criminal proceeds, the financing of terrorism, and the financing of the proliferation of weapons of mass destruction. Revealing the concept of the administrative and legal status of the State Financial Monitoring Service as a unit of financial intelligence, it is worth noting that the general understanding of the legal status involves the position of certain subjects in the state established by legal norms. Peculiarities of the legal status of state authorities are provided for in the normative legal acts that regulate their activities. In our opinion, to study the content of the administrative and legal status of the DSFM, it is appropriate to consider such structural elements as: purpose, functions, tasks and competence (rights and duties). Analysis of the goals, functions, tasks and competences (rights and duties) of the State Financial Monitoring Service as a unit of financial intelligence established at the regulatory and legal level, as well as direct work on the implementation of such tasks, allows us to assert that the administrative and legal status of the State Financial Monitoring Service monitoring involves its active activity as a financial intelligence unit. Therefore, the administrative-legal status of the State Financial Monitoring Service as a unit of financial intelligence should be considered as a set of interconnected elements established by administrative-legal norms, with the help of which the State Financial Monitoring Service implements its powers to prevent and counter the legalization (laundering) of income. proceeds of crime, the financing of terrorism and the financing of the proliferation of weapons of mass destruction.

ІННОВАЦІЙНІ ТРАНСФОРМАЦІЇ ОБЛІКОВО-АНАЛІТИЧНОГО ЗАБЕЗПЕЧЕННЯ УПРАВЛІННЯ БІЗНЕСОМ

Introduction. The innovative potential of business entities indicates their ability to ensure sustainable development and the availability of opportunities to maintain its achieved level in the future, which directly depends on the effectiveness of the accounting and analytical management system and the information produced by it. Changes in approaches to the formation of information at the request of users, the introduction into practice management reports, conducting activities in compliance with the principles of sustainable development, the objective need to adjust vectors of business implementation in the conditions of military operations, and the need to strengthen control over all stages of the full cycle of the economic process actualize the importance of developing an activity strategy. This applies not only to the long-term strategy, but also to the planning of current activities, which significantly increases the value of information regarding the legality of activities at each stage of the economic process. These issues require in-depth scientific research and, based on their results, the development of substantiated proposals aimed at increasing the level of accounting and analytical management support. Problem Statement. The phrase “accounting and analytical support” is quite often included in the title of scientific articles and themes of dissertations for obtaining the scientific degree of Doctor of Economic Sciences and Doctor of Philosophy in the specialty 08.00.09 - Accounting, analysis and audit (by types of economic activity). This does not indicate the exhaustiveness of the problems in the outlined field, but rather actualizes the importance of their in-depth research in the context of meeting the needs of management. The purpose is to consider modern trends in the improvement of the accounting and analytical system of business entities with the actualization of the need to expand the scope of address information at the request of users, to strengthen control over the completeness of the coverage in the process of its formation of all the facts of business practice and conducted operations, and the importance of introducing compliance procedures in this context and financial monitoring. Methods. The logical-abstract method is used, which is based on the elements of the methods of theoretical generalization, analysis, grouping, comparison, description. Results. Society's trust in the accounting institute directly depends on the quality of the information used in the process of evaluating the performance of the activity. Priority is given to summary information, summarized by the indicators of various forms of reporting. This gives reason to evaluate information from the point of view of the “purity” of reporting indicators and the initiation of the characteristic style of the accounting profession and the appropriate behavior of its representatives as managers of a high level of professional knowledge, education, culture and upbringing. It is time to develop a specific code of ethics for a professional accountant as a specialist of a new formation with powerful intellectual potential, a wide range of knowledge and skills, capable of establishing business management on the basis of financial monitoring and compliance. Conclusions. The accounting and analytical system, the components of which can change in the context of taking into account the invariance of management decisions without violating the integrity of the system, remains the informational confirmation of the transition of the business to the platform of sustainable development.

The Difference in Parental Financial Socialisation Across Parental Education Level

Around the world, parental financial socialization now heavily depends on the educational attainment of the parents. This study looked into how parental financial socialization varied depending on the educational attainment of the parents. Parental financial behavior, financial monitoring, financial discussion, financial communication, and financial teaching were used as metrics for measuring parental financial socialization. In this study, a quantitative research approach was used. Since Fetakgomo Tubatse and Intsika Yethu municipalities are the most rural and low-income locations in South Africa, data were gathered through the use of a self-administered questionnaire. Data analysis techniques included Tukey HSD test, Welch robust test, Levene's test, descriptive statistics, and exploratory factor analysis (EFA). The results demonstrated that parental financial socialization varies significantly depending on the educational attainment of the parents. Therefore, financial socialization is more common among parents who have greater education levels than it is among those who have lower education levels. This study's findings are the first to show that parental financial socialization varies significantly depending on the educational attainment of the parents. This study suggests that more research be done on the variations in parental financial socialization across parental educational levels in other areas. Additionally, it is advised that the South African government develop initiatives aimed at addressing and raising parental education levels because research indicates that parents who have completed more education are more likely to participate in financial socialization, which affects young adults' financial literacy and well-being.

The mechanism of interaction between subjects of financial monitoring and subjects of implementation of the law enforcement function

The relevance of the study is determined by the need to effectively detect, stop and investigate financial crimes, including money laundering, terrorist financing and other violations. The purpose of the research is to study the peculiarities of the cooperation of financial monitoring subjects and law enforcement agencies in the fight against the financing of terrorism and to determine directions for its improvement in Ukraine. The methodological basis of this research is general scientific and special methods. Such methods as analysis and synthesis, deduction and induction, normative and positive analysis, systematization, structural-logical, statistical were used. The interaction of financial monitoring subjects and law enforcement agencies in the system of combating the financing of international terrorism was studied and the role of the State Financial Monitoring as the main connecting link in the effectiveness of this interaction was determined. In the course of the analysis of the messages received by the State Financial Monitoring Service and the materials transferred by this institution to law enforcement agencies, the factors that influenced their dynamics and structure were identified (a change in the approach to the detection of financial transactions with signs of financial monitoring, introduced by the new Law of Ukraine "On Prevention and Counteraction of Legalization ( money laundering), the financing of terrorism and the financing of the proliferation of weapons of mass destruction", as well as the martial law introduced in Ukraine, the nature of financial transactions and the bodies created and whose functions include the processing of materials for such transactions). Differences regarding the organization of cooperation between the specified subjects in different countries of the world are due to both the general policy in the country and the corresponding nature of the anti-legalization legislation. Mechanisms of cooperation between financial monitoring subjects and law enforcement agencies have been defined, which should include: exchange of experience and training in the form of regular meetings, establishment of online information exchange during joint activities to investigate financial crimes.

Risks and Benefits in Using RPA in Financial Reporting

In the general picture of financial-accounting processes digitization, RPA (Robotic Process Automation) tools are distinguished by a series of characteristics given, mainly, by the ability to replicate human activities. Thus, unlike Artificial Intelligence, Machine Learning or Cognitive Computing, RPA acts primarily in the user interface area based on clearly defined protocols and procedures without compromising or modifying the basis of the IT infrastructure. That's why these solutions are considered non-intrusive, easy to use and cheaper compared to other financial reporting automation technologies. However, beyond more or less quantifiable benefits, these programs carry certain risks whose awareness is essential to achieve the desired goal of automation. This paper, in addition to presenting the opportunities created by aligning RPA to facilitate financial monitoring and reporting efforts, pinpoints a series of challenges or weaknesses of these solutions that, if not properly managed or combated by alternative solutions, can at least lead to the failure of such a project. The practice of the last years together with the diversification of automation solutions already allow the generation of some conclusions as well as the adoption of a cautious approach regarding the attractiveness of RPA in designing and building financial reports.

Subjects of financial monitoring of cryptocurrency circulation in Ukraine and their powers: financial and legal aspect

The article proves the relevance of studying the subjects of financial monitoring of cryptocurrency circulation in Ukraine and their powers. Based on the analysis of scientific developments on the outlined issues, the author substantiates the absence of systematic scientific developments on the outlined issues.
 The purpose of the article is to substantiate proposals for clarifying the subjects of financial monitoring of cryptocurrency circulation in Ukraine and their powers.
 The author clarifies the classification of subjects of financial monitoring of cryptocurrency circulation. According to the first criterion, «level of financial monitoring», the law distinguishes between subjects of general monitoring (the State Financial Monitoring Service of Ukraine, the Ministry of Digital Transformation, the National Bank of Ukraine, the National Securities and Stock Market Commission) and internal monitoring (banks, insurance and other financial institutions, exchanges and other participants in the virtual asset market, and individuals).
 According to the second criterion, «time of conduct», financial monitoring of cryptocurrency circulation is divided into preliminary, current and subsequent, and the subjects of these types of financial monitoring are identified accordingly.
 Based on the results of the study, the author suggests that the Law of Ukraine «On Prevention and Counteraction to Legalisation (Laundering) of Proceeds of Crime, Terrorist Financing and Financing of Proliferation of Weapons of Mass Destruction» should be amended to provide for the division of subjects of financial monitoring of cryptocurrency circulation not by types of virtual assets, but by levels of such monitoring (general, internal), and also depending on the time of its conduct (preliminary, current, subsequent). When improving this Law, it is advisable to: define the mechanism for financial monitoring of cryptocurrency circulation, which should cover the entirety of the specified types of virtual assets; specify the powers of the subjects of each type of financial monitoring.
 The author concludes that, taking into account the novelties of legislation and the author’s own proposals, it is advisable to include a separate set of such entities as subjects of financial monitoring of cryptocurrency circulation in Ukraine, which is the scientific novelty of this study. At the same time, as a direction for further research, it is necessary to note the development of a model for financial monitoring of cryptocurrency circulation, taking into account important developments of the European experience in this context.

ESSENCE AND RESULTS OF THE "ONE-TIME (SPECIAL) VOLUNTARY DECLARATION BY INDIVIDUALS OF THEIR ASSETS"

Goal. To analyze the Law of Ukraine dated 15 June 2021 No. 1539-IX "On Amending the Tax Code of Ukraine to Stimulate the De-Shadowing of Incomes and Enhancing the Tax Culture of Citizens Through Introduction of Voluntary Declaration by Individuals of Assets Belonging to them and Payment of One-Time Dues to the Budget" [14] and the results of the "declaration of assets" carried out from 1 September 2021 to 1 March 2023. Methodology. To achieve the desired goal, the author used the methods of analysis (isolation of individual parts of the object of research), synthesis (combination of various elements into a single one), comparison (identification of similarities and differences), problem solving (posing difficult questions and finding answers to them), objectivity (impartiality in the selection and analysis of various sources), generalization (highlighting of common characteristics and features). The results. The study established that the "one-time (special) voluntary declaration" combines features of "tax amnesty", "capital amnesty" and "zero declaration". The law itself, in some of its parts, is imperfect and contains norms that violate the principles of equality and social justice. Only 845 people used the right to submit a declaration while the law was in effect. The scientific novelty consists of the analysis of de-shadowing of incomes and replenishment of the state budget (only about 1.5% of the expected revenues were received). At the same time, the author is convinced that there is no need to talk about a "complete failure of declaration". After all, the law is written in such a way that although the majority of citizens did not submit a special declaration, the "composition and volume of assets" as of 1 March 2023 has already been declared, regardless of whether they were acquired with violations or not - in fact, Ukraine implemented "zero declaration" for all citizens. "Zero declaration" sooner or later will become a kind of reference point and in the future will be taken into account by tax authorities during financial monitoring, which should result in taxation of expenses that exceed official income and, possibly, the appearance of misunderstandings between taxpayers and tax authorities. Practical significance. The research contributes to the identification of taxation problems, individual results and conclusions that can be used in the process of further reforming tax legislation and conducting fiscal policy.