IMPACT OF DIGITALIZATION AND THE COVID-19 PANDEMIC ON THE AML SCENARIO: DATA MINING ANALYSIS FOR GOOD GOVERNANCE
IMPACT OF DIGITALIZATION AND THE COVID-19 PANDEMIC ON THE AML SCENARIO: DATA MINING ANALYSIS FOR GOOD GOVERNANCE

Summary/Abstract: The article deals with the impact ofdigitalization and COVID-19 on the choice of AMLscenarios for reforming the system of tactical and strategicmonitoring of transactions carried out by economicentities based on providing good governance. The studyperiod is 2011-2020; the objects of the study are 140countries. Calculations are performed using Data-Miningmethods, such as AML scenarios based on theclassification tree method (one-dimensional CARTbranching method) and clustering of countries accordingto relevant AML scenarios based on agglomerativemethods. There are three stages of research. The firstbuilds a comprehensive system of indicators whichinvolves financial inclusion indicators of the population,the ranking of countries on the Basel AML Index, andeffectiveness of the AML policy implementation at thecountry level. The second stage considers countries’clustering according to the AML scenarios and formalizesthe portraits of countries’ clusters. The third stageexamines the impact of digitalization and COVID-19 onthe choice of AML scenarios. According to the empiricalresults, rapid, moderately rapid, slow and neutraladaptability to external factors are formalized in thepossible scenarios as a result of such effects. Moreover, thecountries’ clustering proves that the money launderingrisks relevant to the country lower and the implementationof the AML measures by the state grows more effectivewith higher financial inclusion for the population in thecountry. The study results can be helpful for authorizedbodies in providing good governance while conductingfinancial monitoring and analysis of information ontransactions carried out by economic entities.

• Details
• Contents