After the emergence of globalization and the tremendous growth in money markets as well as the spreading of bank centers in many world countries, all that has the flexible role in the transportation of capitals amongst those countries. However, this process led to increase the money laundry crime (M.L. is an economic crime aims at giving legal legitimacy to illegally gained money in order to own, use, manage, keep, exchange, deposit, invest, transport, or manipulate it). Moreover, this crime is considered as one of the biggest challenges facing the financial institutions. Consequently, what makes this crime more dangerous is that the more efforts being done to fight money laundry processes, the more fight back and resistance will face these efforts. Money laundry processes witnessed the entering of new groups of professionals from high cultural levels for different specializations such as accountants, legists, information organizers, managers, and other specializations being employed by money laundry criminals to help them in this crime making these processes an integrated industry. With the recently increased globalization, a technological revolution broke out in communications, information, sets, and equipment which are started to be used largely in all state institutions, especially financial and banking directorates. This paper casts light on the phenomenon of money laundry and what is the technology which can be used in banks or even to use to discover money laundry and the role of banks in monitoring as well as to prevent this phenomenon which began to determine the financial and the state institutions.

1. The use of Technology in Discovering Money Laundry
Ramadan Mahmood Ramo
Assistant Lecturer
University of Mosul
Department of Management Information systems
rmrramo@yahoo.com
Dr. Khalil Ibrahim Alsaif
Professor
University of Mosul
Department of Computer Science
khalil_alsaif@hotmail.com
Abstract
After the emergence of globalization and the tremendous
growth in money markets as well as the spreading of
bank centers in many world countries, all that has the
flexible role in the transportation of capitals amongst
those countries. However, this process led to increase the
money laundry crime (M.L. is an economic crime aims
at giving legal legitimacy to illegally gained money in
order to own, use, manage, keep, exchange, deposit,
invest, transport, or manipulate it). Moreover, this crime
is considered as one of the biggest challenges facing the
financial institutions. Consequently, what makes this
crime more dangerous is that the more efforts being done
to fight money laundry processes, the more fight back
and resistance will face these efforts. Money laundry
processes witnessed the entering of new groups of
professionals from high cultural levels for different
specializations such as accountants, legists, information
organizers, managers, and other specializations being
employed by money laundry criminals to help them in
this crime making these processes an integrated industry.
With the recently increased globalization, a
technological revolution broke out in communications,
information, sets, and equipment which are started to be
used largely in all state institutions, especially financial
and banking directorates.
This paper casts light on the phenomenon of
money laundry and what is the technology which can be
used in banks or even to use to discover money laundry
and the role of banks in monitoring as well as to prevent
this phenomenon which began to determine the financial
and the state institutions.
I The Concept of Money Laundry
There is no unanimous agreement among the
countries concerning the concept of money laundry
which makes the attempts to fight these crimes harder
especially at the international level, since some of these
countries take the broad concept of money laundry as for
the considerations of the financial revenues for all the
criminal acts as ways to money laundry like trading,
drugs smuggling, slavery, terrorism, bribe, political
corruption, adultery, currency trading, embezzlement,
arms trading, money counterfeiting, tax evasion,
stealing, and other crimes and illegal acts. However,
some other countries take narrow concept of money
laundry in which these processes are limited only to the
attempt of hiding the financial revenues to smuggle
drugs [17].
II The Meaning of Money Laundry
Ghasala in Arabic (cleans) refers to the action of
purging and purifying something by pouring water on it
to remove its dirt. Furthermore, in Arabic alghusl is the
noun of ghasala, alghusool is the cleaning water, and
almaghsal is the place of cleaning [18][19].
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2. III STAGES OF MONEY LAUNDERING
1. Placement : This is the movement of cash from its
source. On occasion the source can be easily disguised or
misrepresented. This is followed by placing it into
circulation through financial institutions, casinos, shops,
bureau de change and other businesses, both local and
abroad. The process of placement can be carried out
through many processes including[7] :
• Currency Smuggling
• Bank Complicity
• Currency Exchanges
• Securities Brokers
• Blending of Funds
• Asset Purchase[6]
2. Layering : The purpose of this stage is to make it
more difficult to detect and uncover a laundering
activity. It is meant to make the trailing of illegal
proceeds difficult for the law enforcement agencies. The
known methods are[9]:
• Cash converted into Monetary Instruments
• Material assets bought with cash then sold
3. Integration : This is the movement of previously
laundered money into the economy mainly through the
banking system and thus such monies appear to be
normal business earnings. This is dissimilar to layering,
for in the integration process detection and identification
of laundered funds is provided through informants. The
known methods used are[4]:
Property Dealing
• Front Companies and False Loans
• Foreign Bank Complicity
• False Import/Export Invoices
Figure (1) represents the stages of money laundering,
which started with the first step and ended with the third
step.
Figure (1) : Stages of Money Laundering
IV- Money laundering risks
1. Draining the national economy
2. Economic recession
3. Increasing balance of payments deficit and rising
foreign indebtedness
4. The devaluation of the national currency
exchange rate [5].
5. Rising interest rates on local currency
6. Inflation rates rise
7. Increase the tax burden
8. Fluctuation of stability in the stock market
9. The spread of the phenomenon of financial
corruption[1].
10. Rising unemployment
11. High rates of economic crimes
12. The emergence of new criminal categories
13. The emergence of gangs specializing in money
laundering.[13]
V- concept of banking technology
Modern technological methods have emerged as a
quick means to process the funds which lost him the
possibility of control over the source of such money
laundering.
Also highlights the importance of advanced
electronic means , which came as a result of the
communications revolution and the evolution of its network
through the comparison between traditional methods and
modern methods in the stages of money laundering
Traditional methods rely on deposits in banks and
smuggling across the border is safe to deposit operations while
the use of modern means smart tickets, computers and through
the Internet via the system protection and encryption to ensure
the confidentiality of deposit operations.[20]
In terms of employment, in traditional ways are
through remittances or through the means of payment other
than cash such as checks tourist drafts drawn on banks abroad,
but in the modern electronic means is up through a series of
complex and rapid and successive operations that can be with
them separated from their sources of illegal
Regarding the integration phase, they would be in a
traditional means through fictitious transactions and invoices
( bills ) counterfeit and acts the role of gambling and
brokerage , but in the electronic means is up through the
purchase of physical assets and gambling by credit cards and
by means of a personal computer without the mediation of
banks , and in a manner that accuracy, speed and
confidentiality so difficult with him the possibility tracked,
and managed to rid the modern technological tools as
follows[8].
Placement
Layering
Integration
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3. VI Forms of banking technology
In light of the shift from the information age to the age of
knowledge and wisdom and extensive use
For information technology and telecommunications, the
banking and financial services industry by providing systems,
applications and methods
New achieve maximum use of modern technology in the
provision of banking services by high efficiency
And the positive impact on attracting customers, as many
forms of technology emerged emerge as a Photo
Different uses of banking technology, which can be
summarized in both directions who come.
Below are some forms of banking technology[11] :
Plastic cards
Electronic Cash
Electronic Checks
Home Banking
Electronic Funds Transfer
Internet Banking
Interactive TV Banking
Mobile Phone Banking
VII- The use of modern technologies in the discovery of
money laundering
Technology is one of a number of components in the
framework of effective compliance with the global anti-money
laundering (AML). Using current technology tools,
organizations can improve their ability to mitigate the risks of
financial crime. There are many tools to combat money
laundering has been the development of these tools with the
passage of time poor in terms of where the financial services,
data, and technology, and these tools are designed to help
customers meet the challenges of compliance to fight their
own complex money laundering.
There are at least four categories of technologies
that may be useful in the analysis of wire transfers.
These technologies can be classified by the task
they are designed to accomplish:
• wire transfer screening to determine where
to target further investigations.
• knowledge acquisition to construct new
profiles for use during screening
• knowledge sharing to disseminate profiles of
money laundering activities quickly,
reliably, and in a useful form
• data transformation to produce data that can
be easily screened and analyzed.[15]
Figure 2: How Technologies Relate to Each
Other
Technology is one of a number of components in
an effective global anti-money laundering (AML) compliance
framework. By using current technology tools, organizations
can improve their ability to mitigate financial crime risk.
Below is a set of proprietary AML automated tools and
techniques that can help. [16] :
Computer Assisted Subject Examination and
Investigation Tool (CASEit) : A Web-based tool
that facilitates AML compliance, AML transaction
monitoring, trade surveillance, operational risk and
anti-fraud case management
Customer Due Diligence Tool (CDD) : Web-
based tool that acts as the single data entry point
and risk rating for all existing and new customer
and account data in support of Know Your
Customer (KYC) requirements. Additional
customer and account information captured
includes, ultimate beneficial owners,
officers/directors (non-individuals and financial
institutions only), power of attorney, co-signers,
and other related parties
Name/entity matching : Sophisticated matching
and scoring tools and techniques that improve the
searching of account and transaction information
across systems, regions and business lines to
create one view of the customer or to improve the
name/entity screening (e.g. OFAC, PEP, etc) and
matching processes (e.g. 314a, subpoenas, NSL,
ad-hoc searches, etc)
Know your customer quick reference guide : A
user-friendly Web-based guide to anti-money
laundering legislation and regulatory requirements
for nearly 50 countries
Suspicious activity detection tuning : Advanced
methods and techniques that improve the
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4. efficiency and effectiveness of transaction
surveillance technology. We apply an empirical
approach with an emphasis on statistical analysis
of historical transaction data and alert output. By
analyzing the population of data, institutions can
identify trends and patterns and better determine
which behaviors fall outside an acceptable range.
Statistical analysis can be a first step in selecting
appropriate rules and thresholds. Equally important
is the reassessment of the monitored behaviors
and thresholds over time. On-going analysis can
be used to determine correlations and trends
between productive and non-productive alerts
allowing refinements that better target potentially
suspicious activity, reducing overall review efforts.
Fuzzy Computing Applications for Anti-Money
Laundering : Fuzzy computing (FC) has made a
great impact in capturing human domain knowledge
and modeling non-linear mapping of input-output
space. In this paper, we describe the design and
implementation of FC systems for detection of money
laundering behaviors in financial transactions and
monitoring of distributed storage system load. Our
objective is to demonstrate the power of FC for real-
world applications which are characterized by
imprecise, uncertain data, and incomplete domain
knowledge. For both applications, we designed fuzzy
rules based on experts’ domain knowledge,
depending on money laundering scenarios in
transactions or the “health” of a distributed storage
system. In addition, we developped a generic fuzzy
inference engine and contributed to the open source
community.[14]
Genetic Clustering Algorithms for Detecting Money
Laundering : Genetic Algorithms are one of the most
applied class of algorithms for solving global/multi-
modal optimization problems and have been
extensively studied for solving NP-hard optimization
problems. This work presents the development of
genetic algorithms for detecting money-laundering by
_nding the clusters in a graph, constructed using
_nancial and customer data. The developed algorithm
can be applied in other related areas as well. We
present two algorithms based on Genetic Algorithms
for (i) detecting all the clusters in a graph and (ii)
detecting the cluster of any given node [15]
VIII The role of banks in money laundering discovery
The subject of anti-money laundering of the most
important hot on international and regional issues,
which explains the increased interest in him by a lot of
countries that are keen on giving a true picture of the
banking business in the state mode, through the
issuance of a number of laws or to take several
measures and procedures that emphasize its
seriousness in combating money laundering through
banks or related financial institutions .
Where the central bank plays a key role in the money
laundering process, and it must be on the central bank
and the obligation under the law of the following:
1. The balance of the funds coming from out of state or
transferred to the outside through the size of financial
institutions and reporting and movement and
associated activate .
2. Balance control and no apparent unusual balance
resulting from the movement of funds in the state does
not coordinate with the economic reality .
3. monitor the activities of financial institutions in order to
make sure that they are free to deal in transactions or
money laundering .
4. Create a unit is doing the necessary investigations to
uncover the ways and means to keep track of money
laundering.
5. issuing bulletins and instructions for the issuance of the
audit in the field of combating money laundering.
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5. Reference
[1] Adam J. Szubin, “National Money Laundering Risk
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[2] Adha , Ibrahim ( 2003 ) The role of commercial banks on
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[3] Awad Allah , Safwat (2005 m) the economic impact of
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[4] Dennis Cox, Handbook of Anti Money Laundering,2014.
[5] fatf National,” Money Laundering and Terrorist Financing
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[6] Financial Action Task Force (FATF) , www.fatf-gafi.org
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[7] Friedrich Schneider “Money Laundering and Financial
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[8] Dr.. Iftikhar Muhammad & Dr. Manhel Mustafa, “The
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[10] Llu Alsed, Abhishek Awasthi2, “Genetic Clustering
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Mathematics, Autonomous University of Barcelona, Spain
alseda@mat.uab.cat 2 Department of Electrical
Engineering and Computer Science , University of Applied
Sciences Zittau/G orlitz, Germany
{aawasthi,jlaessig}@hszg.de
[11] Dr.. Rafeai brahim al-Hamdani ,”The effect of using
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[12] Dr.. Rafeai brahim , Job environment and its impact on
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[14] Yu-To Chen, Johan Mathe,” Fuzzy Computing
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Amphitheatre Parkway, Mountain View, CA 94043,
USA{ytchen, johmathe}@google.com
[15] Mahmood Shah, Steve Clarke , “E-Banking
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[19] Tantawi, The Legislative Confrontation of Money
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[20] Punitha Sahaya Mary Francis,” Banking Technology
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punithaf2007
International Journal of Computer Science and Information Security (IJCSIS),
Vol. 15, No. 8, Augus 2017
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