Exploring the Role of Predictive Analytics in Enhancing Anti-Money Laundering Surveillance and Transaction Monitoring Systems

Authors

  • Chinedu Okafor Federal University Wukari, Km 200 Jalingo Road, Wukari, Taraba State, Nigeria Author
  • Amina Bello Kano University of Science and Technology, Ring Road Phase II, Wudil, Kano State, Nigeria Author

Abstract

Financial crime detection and prevention mechanisms have evolved substantially over the past two decades in response to increasingly sophisticated money laundering techniques. This research presents a comprehensive analytical framework for enhancing anti-money laundering (AML) surveillance systems through advanced predictive analytics methodologies. We demonstrate that integrating machine learning algorithms with traditional rule-based transaction monitoring systems can significantly improve anomaly detection rates while simultaneously reducing false positive alerts by 43\%. Our approach leverages tensor-based representations of financial transaction networks combined with temporal pattern recognition to identify complex money laundering typologies that conventional systems frequently miss. The resultant hybrid model exhibits superior performance in identifying structuring behaviors, smurfing patterns, and trade-based money laundering schemes across diverse financial ecosystems. Experimental validation across a synthetic dataset of over 18 million transactions demonstrates that our methodology increases true positive detection rates by 27\% while decreasing investigation workload by 31\% compared to conventional methods. This research contributes to the broader field of financial crime analytics by establishing a mathematically rigorous foundation for next-generation AML surveillance systems that balance regulatory compliance requirements with operational efficiency considerations.

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Published

2024-08-04

How to Cite

Exploring the Role of Predictive Analytics in Enhancing Anti-Money Laundering Surveillance and Transaction Monitoring Systems. (2024). International Journal of Data Science, Big Data Analytics, and Predictive Modeling, 14(8), 1-16. https://kernpublic.com/index.php/IJDSBDAPM/article/view/2024-AUG-04