A causal model of the declaration intention of banks for suspected money-laundering transactions based on organizational commitment perspective

Abstract

Purpose Anti-money laundering has attracted much global attention, driving banks to invest in the establishment of suspicious transaction report mechanisms for the declaration of suspicious transactions. However, very few studies discuss how to influence bank employees to proactively declare suspicious transactions. Therefore, the purpose of this study is to, based on an organizational commitment perspective, establish a causal model that can assist banks to identify key factors affecting the intention to declare suspicious transactions. Design/methodology/approach This study first summarized five factors – regulatory focus, organization climate, situational constraints, personality traits and role stress – and their composition constructs as the basis for measurements. An interview-based survey of nine Taiwanese banks was conducted. Then, this study adopted the decision-making trial and evaluation laboratory method to analyse the interplay between the five factors to identify the causal model and to explore the differences in the effects of the key factors, arising from the different organizational and job patterns, on the intention to declare suspicious transactions. Findings The results show that regulatory focus and organizational climate are the most important causal factors affecting employees’ intention to declare suspicious transactions, whereas role stress and personality traits are the most influenced effect factors. In addition, this study also confirmed that under different organizational and job patterns, the understanding of employees will change. Originality/value This paper provides insight into the interplay between the five factors based on an organizational commitment perspective. The findings can assist banks in managing and monitoring the implementation of the suspicious transaction report mechanism.

Personal responsibility and knowledge about money laundering: a study with Brazilian accountants

“…H2 is corroborated by the statistical evidence, indicating the relationship between personal responsibility and greater knowledge and ability to identify evidence of money laundering, or its red flags ( β 0.516, p < 0.001). This evidence reinforces the findings of Clements (2020) and Sallaberry (2022) to the extent that knowledge or awareness of illicit acts is related to greater professional responsibility, refuting the relationships found in the samples of Chan et al (2020) and Rustiarini et al (2021). These results reveal that knowledge about financial crimes, within the scope of forensic accounting, is part of the set of actions that mitigate fraud, such as the attribution of responsibilities (Akinbowale et al , 2020; Serhii et al , 2019).…”

“…The relationship between these variables is supported even in the empirical literature (Alleyne et al , 2017; Brody et al , 2020; Kaplan and Whitecotton, 2001; Tuan Mansor et al , 2020; Schultz et al , 1993). Commitment guides fraud reporting (Shafer et al , 2016), but recent evidence indicates limitations in the relationship between personal responsibility and fraud detection (Chan et al , 2020; Rustiarini et al , 2021). In the findings of Clements (2020), professionals who detect fraud have a high level of conscientiousness developed by different aspects, including training, qualification and experience.…”

“…The phenomenon of denunciation has historical, sociological, psychological and legal aspects (Krambia-Kapardis, 2020). Thus, it involves intrinsic knowledge (someone’s essence) (Curtis and Williams, 2014; Martin and Cullen, 2006; Taylor and Curtis, 2010) and evidence from money laundering (Chan et al , 2020; Clements, 2020; Rustiarini et al , 2021). In this sense, if an accounting professional (possible whistleblower) feels defended by the legislation, he/she can be an effective anti-corruption agent that helps deter fraud (Krambia-Kapardis, 2020), as commitment guides the reporting of fraud (Shafer et al , 2016), as well as that associated with knowledge encourages ethical behavior (Taylor and Curtis, 2010) and increases the likelihood of making complaints (Brennan and Kelly, 2007; Verschuuren, 2020).…”

Bibliometric analysis of Journal of Money Laundering Control: emerging trends and a way forward

“…The documents in this cluster focussed on the compliance and regulatory measures through AML, the law of state responsibility and consequences in international law. AML has driven banks to invest in the adoption of the “Suspicious Transaction Report Mechanism” for the identification of doubtful connections globally (Viritha and Mariappan, 2016; Chan et al , 2020). The use of soft law promotes the harmonisation of international AML standards through the FATF, although the contribution of the FATF leftover is unclear in international law (Ebikake, 2016).…”

Developing a laundered funds destination theory: applying the Walker–Unger gravity model to US-based money launderer country preference from 2000 to 2020

“…Chan et al (2020) developed a method to identify casual factors that influence an individual’s intention to report suspicious transactions. Chan et al found that regulatory focus and organizational culture are the most influential factors on reporting illicit financial activity while stress and personality straits are the strongest detractors.…”