Fighting financial crime in the age of electronic money: opportunities and limitations
| DOI | https://doi.org/10.1108/13685201011057118 |
| Pages | 202-214 |
| Published date | 20 July 2010 |
| Date | 20 July 2010 |
| Author | Giorgio Merlonghi |
| Subject Matter | Accounting & finance |
Fighting financial crime in the age
of electronic money:
opportunities and limitations
Giorgio Merlonghi
Italian Financial Intelligence Unit – Banca d’Italia,
Roma, Italy
Abstract
Purpose – The purpose of this paper is to stimulate some reflections on the potentially contradictory
relationship between the adoption of innovative payment instruments and the prevention and fight
against financial crime. The ideal addresses of the paper are regulators in these two fields (Central
Banks; Financial Intelligence Units).
Design/methodology/approach – The paper is largely based on reflections coming from the
author’s background as a central banker with a long experience in the statistical analysis of financial
data with an anti-money laundering (AML) focus.
Findings – The paper takes the move from the present and prospective characteristics of the
payment means and moves on to analyse briefly the possible implications of their evolution in the fight
against money laundering and the financing of terrorism. The analysis shows how some factors that
make innovative payment instruments desirable may, at the same time, represent elements of
weakness in the prevention of financial crime.
Research limitations/implications – The paper addresses a number of theoretical and systemic
issues but no specific data or calculations are provided to evaluate alternative regulatory scenarios.
Further studies could offer a more quantitative approach, in an attempt, for instance, to estimate
the costs and benefits of the evolution of the praxis and legislation in the field of payment system
and AML.
Practical implications – The paper openly tackles the cross effects of regulation in the financial
sector, specifically addressing the potential risk factor represented by loosely regulated innovations of
the payment instruments. The argument is intended to highlight both the importance of technological
evolution and the necessity of a proper supervision over potential loopholes and unguarded passages
that could be exploited by financial criminals.
Originality/value – The paper addresses questions of particular relevance in the present, fast
developing world of advanced technological payments and global financial crime. The author
underlines explicitly how these two fields share some common features; an original argument is
developed with reference to the possible risk of unwanted spillovers between these two areas of public
interest.
Keywords Crimes, Money laundering, Electronicfunds transfer systems, Banking, Payments,Italy
Paper type Viewpoint
1. Introduction
In the latest years, the evolution of information technologies (ITs), the continuous
innovations in the offer of financial services, the grow ing number of online
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/1368-5201.htm
This paper was presented at the 26th International Symposium on Economic Crime –
Cambridge, 3 September 2008. The views and opinions expressed in this paper are those of the
author and do not necessarily reflect the position of the institution he works for.
JMLC
13,3
202
Journal of Money Laundering Control
Vol. 13 No. 3, 2010
pp. 202-214
qEmerald Group Publishing Limited
1368-5201
DOI 10.1108/13685201011057118
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