Assessing Money Laundering Risk of Financial Institutions with AHP: Supervisory Perspective

Ke Jia, Xi Zhao, Ling Zhang

Human Resources Department, Tianjin University, Tianjin, China.
School of Management, Tianjin University, Tianjin, China.

DOI: 10.4236/jfrm.2013.21004                

Abstract

This paper proposed a risk assessment model with which supervisory authorities can calculate the money laundering risk (MLR) level of financial institutions and make comparisons among multiple institutions. The model is based on the Analytic Hierarchy Process (AHP) and decomposes MLR into two second-tier criteria, i.e. Inherent Risk & Control Risk. AHP pair wise comparisons made by the experts from various fields are processed through AHP software to get the weight of each factor. Using this model, MLR of each financial institution could be obtained and certain comparison among them could be carried out.

Keywords

Money Laundering Risk; Assessment; AHP

Conflicts of Interest

The authors declare no conflicts of interest.

References

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