Banks' vulnerabilities to money laundering activities

Purpose This paper aims to provide insights as to why money laundering persists in banks and their weaknesses as gatekeepers. Design/methodology/approach This paper contextualizes the design and proliferation of anti-money laundering (AML) measures; investigates the different manners of conceptualizing them; and provides insights pertaining to probable limitations of these measures. The paper relies on primary data from statutes and secondary data from published sources. Findings The paper's findings suggest that competitive pressures, shareholders return imperative, and lucrative misaligned incentives for management contributed to weaknesses in effective compliance in banks. Originality/value Much has been said about money-laundering activities enabled by the banking sector. This paper contributed to insights as to why they persist despite AML rules, and what measures could be further taken to enhance compliance effectiveness.