TITLE:
Assessing Money Laundering Risk of Financial Institutions with AHP: Supervisory Perspective
AUTHORS:
Ke Jia, Xi Zhao, Ling Zhang
KEYWORDS:
Money Laundering Risk; Assessment; AHP
JOURNAL NAME:
Journal of Financial Risk Management,
Vol.2 No.1,
March
28,
2013
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.