Money Laundering Risk Evaluation of Financial Institution with AHP Model

Abstract

Money laundering risk assessment is a primary tool to combat the perils of money laundering. This study is based on a model of risk assessment, which assists the management of financial institution to evaluate the range and level of money laundering risk (MLR). In this model, MLR is primarily divided into two risk levels, i.e. Inherent Risk & Control Risk with their auxiliary subdivisions. Analytic Hierarchy Process (AHP) software assists in its computations and provides for pairwise weights and comparisons. By using this model, money laundering risk of a financial institution could be assessed.