Research On Customer Identification And Money Laundering Risk Assessment Of Financial Institutions

China has established anti-money laundering system in 2003, which has a great deterrent effect on our country's money laundering activities in the early stage. With the gradual deepening of the anti-money laundering, the disadvantages of the "rule-based" regulatory approach are gradually exposed. Based on a customer is a violation of the “one law and four regulation” in one or a few transactions standard to determine whether he is laundering the money or not has not well adapted to the current situation. In view of this, the world also appeals to transform the regulatory approach from the "rule-based" to “risk-based”. The essence of “risk-based” is to evaluate the money-laundering risk of the products, services provided by financial institutions and customers, and then take corresponding anti-money laundering measures to match the risk, this allows more efficient use of anti-money laundering regulatory resources. In carrying out the “risk-based” regulatory approach, from money laundering risk assessment of customers to get started, this paper first evaluates the money laundering risk of the general population and then the financial institutions exert key regulation of customers with higher money laundering risk. For those public officials who launder the money by stakeholders, we also need to pay attention to their money laundering risk, but because it is unable to determine their money laundering risk directly as the general population, this paper make separate study of their money laundering. The main contents are as follows:First, through teasing out domestic and foreign related literatures, this paper argues that during the transition of the regulatory approach from "rule-based" to "risk-based", the area of a customer, types of business and industry which a customer belongs to are the main indicators to judge money-laundering risk of a customer. Each level indicator is also subdivided into three secondary indicator with different risk levels, and thus constructs comprehensive evaluation index system. Since China's current research on customer money laundering risk assessment is mainly focused on the theoretical level, and how to implement specifically in practice rarely involved. In view of these, based on the statistical analysis results of 221 money laundering cases, this paper uses empirical way to divide the risk levels of type of business and industry factors, in addition, the money laundering risk levels of geographical factors are divided by cluster analysis.Second, through the statistical analysis of money laundering cases, this paper extracts three corresponding evaluation index of each money laundering case and obtains the distribution in the secondary indicator for each level indicator. Rating scale method is used to quantify the secondary indicators having different risk levels, and get the original evaluation matrix. By standardizing the original evaluation matrix, the weight of every level indicator is given by means of entropy weight method and combining with membership function this paper determines a customer's money-laundering risk level. Meanwhile this paper uses C5.0 algorithm to construct a decision tree model and then carries out application research on customer money laundering risk assessment to verify the effectiveness of the indicator weights calculated by the above entropy weight method.Third, when a customer's identity can be determined, the above method can be used to assess his money laundering risk, for the situation that illegal public officials often make use of their stakeholders to launder the illegal incomes, we first need to identify the identity of stakeholders. Aiming at this problem, this paper first defines the range of stakeholders involved in public officials' money laundering, puts forward a process from the perspective of behavior science by Maslow's hierarchy of needs to identify stakeholders. In addition, this paper analyses the identification of abnormal transaction of different business types in order to identify the transaction subject and then identifies the stakeholders of transaction subject to determine whether there is a public officer behind the scene, meanwhile for the ambiguous problems that may exist in this process, this paper puts forward the corresponding identification measures.Fourth, for the issue of money laundering risk of public officials, by stakeholders to identify the interest subject who manipulate the money laundering behind the scene, this paper proposes to judge an interest subject's money laundering risk by comparing the identification coincidence degree of stakeholders and interest subject, on this basis this paper constructs the model diagram of identity coincidence degree between them for specific research, meanwhile money laundering cases have been applied to illustrate.Finally, this paper puts forward countermeasures and suggestions on the improvement and execution of anti-money laundering related system, customer identification of financial institution, and the exploration of methods which are used to evaluate the money laundering risk of a customer.