Factors Effecting Anti Money Laundering Regulations An empirical evidence from banking sector of Pakistan

Abstract

Purpose- The purpose of this study is to explore empirical relationship of Customer record keeping and suspicious transaction reporting which are FATF anti money laundering banking regulations, with unfair work distributions, unrealistic sales targets and employee employees awareness. Study is conducted in context of banking sector of Pakistan. In this exploratory study, it is tried to find if customer record keeping and suspicious transactions reporting’s effectiveness is impacted by unfair work distribution, unrealistic sales targets and employee awareness. Design/ methodology/ approach- Sample of 407 respondents working in 10 top of the credit rating private banks from all over Pakistan has been collected. Questionnaire has been designed according to different aspects and variables of the study. Findings- suggest that unfair work distribution and unrealistic banking targets have a moderate inverse relationship with customer record keeping and suspicious transaction reporting. While employee training has a week positive relationship with both dependent variables customer record keeping and suspicious transactions reporting. Research Limitations-The study is conducted only considering Pakistan’s banking sector. To check the relations of these variables in other countries, financial institutions of other countries should also be studied. Originality/ Value-The study suggests that to make FATF regulations more effective against money laundering, banks should focus on employees training through special budget allocation for the purpose. Banks should also make sure to provide sufficient no. Of employees so the problem of unfair works distribution could be eliminated. Study also suggest that unrealistic sales targets and deposit pressure can decrease service quality and audit scoring. It can also lead towards imposing of penalties by regulatory authorities. Management should balance their financial targets with compliance quality.