scholarly journals Assessment of Banks Activities on Risk Control of Clients in the Financial Monitoring System

2021 ◽  
pp. 44-50
Author(s):  
Nataliya Vnukova ◽  
◽  
Inna Pleskun ◽  
Sergey Sokol ◽  
Oleksandr Yaholnytskyi ◽  
...  
Keyword(s):  
Cluster Analysis ◽  
Monitoring System ◽  
Risk Control ◽  
Control Policy ◽  
Practical Experience ◽  
National Bank ◽  
Asymmetric Distributions ◽  
Financial Monitoring ◽  
Financial Transactions ◽  
Legal Entities

Current legislation requires banks to continuously monitor all financial transactions of their customers – both legal entities and individuals. However, despite penalties, in the form of multimillion fines and written warnings most Ukrainian banks do not meet the requirements of the National Bank of Ukraine for development, approval and implementation of internal documents on financial monitoring. The purpose of the article is to summarize the practical experience of the banks in compliance with the policy of risk control of the bank's clients in the financial monitoring system. The sample of this study is 75 Ukrainian banks. The internal documents of existing Ukrainian banks on issues of internal bank financial monitoring were analyzed. The components of the risk control policy of the bank's clients were selected and the information on the completeness of the risk control policy of the bank's clients in the existing banks of Ukraine was summarized. The completeness of the risk-control policy of the bank's clients is determined at thefollowing stages: grouping of components of the risk-control policy of the bank's clients; clustering of Ukrainian banks according to the level of completeness of the bank's clients risk control policy. The method of cluster analysis identified groups of banks for the level of full risk-control of their clients. The four clusters with certain asymmetric distributions in their banks were identified. According to the results of generalization of practical experience of banks in compliance with the risk control policy of the bank's clients in the financial monitoring system, namely internal documents of existing banks on internal financial monitoring, it was found that some banks did not have actually developed internal policies or rules on compliance with the requirements of risk control legislation in the field of financial monitoring.

scholarly journals DEVELOPMENT OF DATABASES STRUCTURE OF INTERNAL ECONOMIC AGENTS FINANCIAL MONITORING

2021 ◽  
Vol 3 (38) ◽  
pp. 204-213
Author(s):  
O. Kuzmenko ◽  
T. Dotsenko ◽  
V. Koibichuk
Keyword(s):  
High Risk ◽  
Economic Agent ◽  
Economic Agents ◽  
Financial Transaction ◽  
Reference Information ◽  
Credit History ◽  
External Sources ◽  
Financial Monitoring ◽  
Financial Transactions ◽  
Legal Entities

Abstract. The article presents the results of developing the structure of databases of internal financial monitoring of economic agents in the form of a data scheme taking into account the entities, their attributes, key fields, and relationships, as well as the structure of units of regulatory information required for basic monitoring procedures based on internal and external sources. The block diagram of the financial monitoring databases, formed in the modern BPMN 2.0 notation using the Bizagi Studio software product on the basis of internal normative and reference documents, consists of tables containing information on: the client's financial monitoring questionnaire; list of risky clients according to the system of economic agent; the list of clients for which there are court rulings and financial transactions which may contain signs of risk; list of PEP clients of the economic agent; list of clients for which there is a share of state ownership (PSP); list of prohibited industries; reference books (type of financial transactions; features of financial transactions of mandatory financial monitoring; features of financial transactions of internal financial monitoring; identity document; type of subject of primary financial monitoring; type of notification; legal status of transaction participant; type of person who related to the financial transaction; the presence of permission to provide information; signs of financial transaction; regions of Ukraine); directory of risk criteria; clients with FATCA status. The scheme of the structure of databases of internal financial monitoring of economic agents using normative and reference information on the basis of external sources is presented by tables containing information on: legal entities, natural persons-entrepreneurs, public formations, public associations, notaries, lawyers of Ukraine; the list of persons related to terrorism and international sanctions, formed by the State Financial Monitoring Service of Ukraine; list of public figures and members of their families; sanctions lists (National Security and Defense Council of Ukraine; Ministry of Economic Development and Trade of Ukraine; OFAC SDN List — US sanctions list; worldwide sanctions lists; EU sanctions lists); lists of high-risk countries (aggressor state, countries with strategic shortcomings, countries with hostilities, list of the European Commission for countries with weak APC / FT regime, countries with high levels of corruption, self-proclaimed countries, countries with high risk of FT, offshore countries); The First All-Ukrainian Bureau of Credit Histories, which describes the credit history, credit risks of individuals and legal entities in Ukraine (PVBKI); International Bureau of Credit Histories, which describes the credit history of individuals and legal entities of clients of Ukrainian economic agents (MBKI); list of dual-use goods; list of persons with OSH; AntiFraud HUB — information about fraudsters; register of bankruptcies; register of debtors; register of court decisions; database of invalid documents; list of persons hiding from the authorities; register of EP payers; registers of encumbrances on movable and immovable property; data on securities; lustration register; register of arbitration trustees; corruption register; bases of Ukrainian organizations; information on foreign companies. Integrated use of the developed databases based on the proposed schemes will improve the procedures for financial monitoring by economic agents and solve several current problems. Keywords: economic agents, financial monitoring, structural scheme of the database, normative and reference information of internal securement, normative and reference information of external securement. JEL Classification E44, D53, G21, G28, G32 Formulas: 0; fig.: 2; tabl.: 0; bibl.: 12.

scholarly journals FINANCIAL MONITORING OF ECONOMIC AGENTS CLIENTS BASED ON THE VERIFICATION AND IDENTIFICATION INCOMING AND OUTGOING DOCUMENTS

2021 ◽  
Author(s):  
Olha Kuzmenko ◽  
Vitaliia Koibichuk ◽  
Roman Kocherezhchenko
Keyword(s):  
Block Diagram ◽  
Balance Sheet ◽  
Economic Agents ◽  
Leading Role ◽  
Employment Agreement ◽  
Income Statement ◽  
Identification Documents ◽  
National Bank ◽  
Financial Monitoring ◽  
Financial Transactions

For the successful conduct of certain financial transactions, economic agents determine the requirements for incoming and outgoing documents and develop appropriate templates for documents and messages. Identifying and verifying persons are effective tools that are given a leading role and help prevent the circulation of criminal funds through the financial and economic system, reveal the sources of illicit income, and identify the beneficiaries of such illegal funds. The article develops a block diagram of incoming and outgoing documents related to identifying and verifying persons subject to financial monitoring by economic agents and provides a detailed description of each stage of verification, requirements for documents, and content. Verification of incoming documents consists of three stages. At the 1st stage, identification documents are checked; at the 2nd stage – constituent documents (charter, founding agreement, model charter, decision on creation, changes to the constituent document, corporate agreement, description of documents, ownership structure, employment agreement (contract), regulations on governing bodies, decisions on election of officials, appointment order, card with sample signatures), at the 3rd stage financial documents (balance sheet, report on financial results, transcripts of balance sheet items, declarations, income statement, certificate on the absence of arrears of payments to the budget, certificate of cash flow from the servicing bank, account statement, certificate of indebtedness, patents, licenses, permits, certificates, certificates, credit agreements, guarantee agreements, letters of credit, loans, collateral, mortgages, guarantees, agreements with suppliers and buyers, lease agreements). The block diagram of the source documents for financial monitoring consists of four tuples, the key determinants of which are notifications to the Specially Authorized Body, notifications to the Security Service of Ukraine, information to the National Bank of Ukraine, letters to the client (servicing, from conducting financial transactions, to freezing the client's assets or to freezing assets on a financial transaction frozen by an economic agent).

Who's in Control of the Ark? A Study of Internal Controls in Operating and Auditing A Small Preschool

2019 ◽  
Vol 34 (2) ◽  
pp. 23-39 ◽  
Author(s):  
Elizabeth V. Grace ◽  
Ashley Davis
Keyword(s):  
Internal Control ◽  
Business Processes ◽  
Practical Experience ◽  
Auditor Independence ◽  
Internal Controls ◽  
Control Environment ◽  
For Profit ◽  
Not For Profit ◽  
Analytical Thinking ◽  
Financial Transactions

ABSTRACT This instructional case encourages analytical thinking about internal controls in both the operations and audit of a small, not-for-profit organization. Students examine a control environment characterized by unauthorized expenditures, lack of documentation, and missing documents. Using the COSO (2013) framework, students demonstrate understanding of business processes as they identify internal control risks and deficiencies, and recommend control improvements. Auditing students additionally apply management assertions about financial transactions and assess auditor independence. Students gain practical experience in developing flowcharts of accounting processes and writing a management letter for a familiar organization: a preschool.

Business Process Model for Monitoring the Automatic Payments in the "Client-Bank" System

2021 ◽  
pp. 18-28
Author(s):  
Olha V. Kuzmenko ◽  
Serhii V. Mynenko ◽  
Serhii V. Lyeonov ◽  
Aleksy S. Kwilinski
Keyword(s):  
Money Laundering ◽  
Business Process ◽  
Process Model ◽  
Foreign Currency ◽  
Business Process Model ◽  
Financial Condition ◽  
Tax Payments ◽  
Financial Monitoring ◽  
Bank System ◽  
Legal Entities

The innovative development of banking presupposes modernization in the approaches to anti-money laundering. The article considers the issue of financial monitoring of banking operations without bank employees’ participation through the "Client-Bank" system. Two models for monitoring the automatic payments in the "Client-Bank" system are identified. The list of functions performed by the "Client-Bank" system in terms of types of clients: individuals and legal entities (including individuals-entrepreneurs) was determined. The first model describes general indicators of transactions that have the risk of money laundering. The second model focuses on the specific features of the "Client-Bank" system functionality for legal entities or individual entrepreneurs. Several criteria for the riskiness of the operation in terms of money laundering are considered. The developed business process model takes into account the verification of the participant's affiliation to countries that do not implement or improperly implement the recommendations of intergovernmental organizations, the participant's affiliation to politically significant or related persons and the withdrawal of capital abroad, including offshore areas . In addition, checks of financial condition of counterparties, regularity of receipts of payments and cash withdrawals, circulation of foreign currency, loan repayment, receipt of a significant amount of cash, ip-address of the client and description of the transaction are included. A feature of the business model for legal entities is the verification of NACE compliance, analysis of the number of contractors, analysis of the timeliness of tax payments. Directions for further development of this study identify the possibility of intellectualizing the financial monitoring system and improving the regulatory framework in the system "Client-Bank" to enhance the system of anti-money laundering in banking institutions.

scholarly journals Inferring Companies Similarities from Brazilian Government Expenditure Data

2015 ◽  
Author(s):  
Marcelo Pita ◽  
Gustavo Torres
Keyword(s):  
Cluster Analysis ◽  
Federal Government ◽  
Government Expenditure ◽  
Connected Components ◽  
Public Agencies ◽  
Basic Cluster ◽  
Brazilian Government ◽  
Expenditure Data ◽  
Financial Transactions

A graph-based method is proposed for inferring similarities among companies from their affiliations in the context of expenditure financial transactions in the Brazilian Federal Government. There are trusted and untrusted companies. We performed a basic cluster analysis in the companies network to verify whether clusters (connected components) are discriminative concerning companies trustworthiness. Results show evidences that this is true, reinforcing the following hypotheses: (1) there are suppliers associations, which evidences the formation of cartels; and (2) public agencies and agents play an important role in the legality of financial transactions.

scholarly journals Interrelation of theoretical concepts of jurisprudence and legal practice (using the example of the category «legal subjectity»)

2021 ◽  
pp. 94-99
Author(s):  
V. A. Sichevliuk
Keyword(s):  
Practical Experience ◽  
Correct Interpretation ◽  
Legal Practice ◽  
Public Authorities ◽  
Basic Principles ◽  
Legal Entity ◽  
Theoretical Concepts ◽  
Legal Science ◽  
Organizational Integrity ◽  
Legal Entities

The article discusses the interrelation between theoretical concepts of jurisprudence and legal practice on the exampleof the category «legal subjectity». With an indication of real practical situations, the necessity of implementing the relevant theoretical achievements of legal science in the standards of practical legal activity is justified. It is noted that at the level of practice the integral content of legal categories, principles and other theoretical concepts of jurisprudence is inevitably operationalized and takes the form of terms. At the same time, the requirement for the unambiguity of the latter creates a constant need for practice in interpreting their content. The correct interpretation of the terms involves a combination of the achievements of theory and practical experience. Deviation from this rule leads to errors in terminology and mistakes in the interpretation of law. Attention is drawn to the need of using in the texts of judicial, administrative, contractual, and other documents the correct wording on the legal subjectity of separated units and governing bodies of legal entities. The contradictions of the notion of «complex legal entity» are also highlighted. Examples are given of how the legislative acts of Ukraine in some cases do not correspond to the basic principles of the legal entity institution, allowing the existence in the internal organizational space of legal entities of other legal entities. It is emphasized that this status of structural subdivisions of organizations and public authorities contradicts the need to ensure their organizational integrity as subjects of law, endowed with a complete kind of legal subjectity, namely «personal legal subjectity». Keywords: theoretical concepts of jurisprudence, category «legal subjectity», legal entity, personal legal subjectity, structural division of a legal entity.

On Transactions Using the Financial Platform

Auditor ◽  
2021 ◽  
pp. 3-9
Author(s):  
E. Smirnov
Keyword(s):  
Federal Law ◽  
One Year ◽  
Financial Transactions ◽  
Legal Entities

July marks one year since the adoption of the Federal Law of July 20, 2020 No. 211-FZ «On the execution of financial transactions using a fi nancial platform». Th e practice of applying this legal act has shown that it signifi cantly facilitated the access of individuals to fi nancial services and that it makes sense to extend its eff ect in terms of the use of financial platforms also to legal entities and individual entrepreneurs.

scholarly journals Prototyping of information system for monitoring banking transactions related to money laundering

2019 ◽  
Vol 65 ◽  
pp. 04013 ◽  
Author(s):  
Serhiy Leonov ◽  
Hanna Yarovenko ◽  
Anton Boiko ◽  
Tetiana Dotsenko
Keyword(s):  
Information System ◽  
Monitoring System ◽  
Money Laundering ◽  
Business Processes ◽  
Automated System ◽  
Regulatory Agencies ◽  
Reputational Risk ◽  
Structural Database ◽  
Business Process Monitoring ◽  
Financial Monitoring

The article deals with the prototyping of an information system for intrabank monitoring of transactions related to money laundering. It has been proven that the automation of financial monitoring system would increase the bank’s efficiency due to examining all bank transactions without exception, leveling the human factor, maximizing the speed of identifying suspicious transactions, which will provide the bank management with the possibility to reduce reputational risk and minimize losses related to paying penalties imposed by regulatory agencies. It has been established that the prototype of the information system for monitoring transactions related to money laundering through banks should consist of a model of the business process monitoring in an automated system environment, a DFD model of automated monitoring of banking transactions, a structural database model, user interface forms and the logic of validation business rules. The resulting methodological and practical developments are a universal component of the financial monitoring system of any bank since they have the opportunity to transform and adapt to new standards for reporting entities or differentiation of the business processes of a bank.

scholarly journals The Impact of Open Book Management on Achieving Differentiation in the Business Organization

2016 ◽  
Vol 6 (2) ◽  
pp. 223
Author(s):  
Hamzeh Al- Sha’ar
Keyword(s):  
Practical Experience ◽  
Study Data ◽  
Business Organization ◽  
Business Organizations ◽  
Open Book ◽  
Significance Level ◽  
National Bank ◽  
Study Population ◽  
The Impact ◽  
Organization Study

This study aimed to know the concept open Book management and differentiation in the organizations and studying the effect of the relation between open book administration and differentiation in the organization. Study population consisted of all the commercial banks in Jordan, while the study sample consisted of (30) mangers and division mangers in Cairo Amman Bank and the Kuwait National Bank. The questionnaire has been used as an instrument to collect the study data. The study reached a set of results including: there are roles with statistically significance at significance level (a≤0.05) for paying the wages and the incentives on achieving differentiation in the business organizations. There are differences open book management on differentiation in the organizations attribute to gender, scientific qualification and practical experience variables. 

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