INSTITUTIONAL FACTORS OF THE EFFECTIVENESS OF THE FINANCIAL MONITORING SYSTEM
Abstract
This article examines the problem of identifying factors that threaten the efficiency of the financial monitoring system and determining measures to improve its effectiveness. It is shown that the financial monitoring system is an important tool, the success of overcoming many dangerous socio-economic phenomena depends on its effectiveness and efficiency. This tool is particularly important because it can be used even in cases where the possibilities of using other tools are significantly limited. The main factor threatening the effectiveness and efficiency of the financial monitoring system is the danger of an increase in the level of transaction costs of bureaucratic financial monitoring procedures for persons not involved in the process of laundering dirty money. It has been proven that the effectiveness of the financial monitoring system is determined by the effectiveness of the formal rules of financial monitoring and the formal rules of financial investigations. The main tasks of the formal rules of financial monitoring are to ensure the detection of the largest possible share of financial transactions related to money laundering, while at the same time ensuring a low level of erroneous determinations of financial transactions as dubious, which in turn requires the definition of clear criteria for the dubiousness of financial transactions by appropriate formal rules and ensuring that as many financial transactions as possible are covered by inspections. The main tasks of the formal rules of financial investigations are to ensure a high probability of proving the fact of laundering dirty money and at the same time to ensure an easy appeal procedure in the event of an erroneous determination of a financial transaction as dubious. Implementation of these tasks requires the formal rules of financial investigations to create appropriate conditions and a system of incentives for the relevant officials to perform their official duties. It is proposed to increase the efficiency of the formal rules of financial monitoring and formal rules of financial investigations to introduce widespread use of Big Data and AI algorithms in the financial monitoring system, which will allow to largely automate the process of checks and detection of questionable transactions and trace a much longer chain of financial transactions and collect more evidence for proving the fact of laundering dirty money.
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