TY - JOUR
T1 - The anti-money laundering risk assessment
T2 - A probabilistic approach
AU - Ogbeide, Henry
AU - Thomson, Mary Elizabeth
AU - Gonul, Mustafa Sinan
AU - Castairs Pollock, Andrew
AU - Bhowmick, Sanjay
AU - Bello, Abdullahi Usman
PY - 2023/7/1
Y1 - 2023/7/1
N2 - Since the 1980s, researchers and practitioners examining the vulnerabilities of financial institutions to money laundering risk have offered some insights on how experts conduct anti-money laundering risk assessments. A common theme in the risk assessment literature is the emphasis on box-ticking rather than exercising judgment case-by-case, which has influenced our consideration of whether experts in this domain are immune to cognitive biases that novices can be vulnerable to during risk assessment. We found that both experts and novices were overconfident about their distribution judgments and this effect was slightly more pronounced in the expert group. One manifestation of the overconfidence effect in both groups was the preference for false-positive over false-negative errors. Notably, novice participants slightly outperformed expert participants in the proportion of correct outcomes. A feedback mechanism that is effective at alleviating biases, improving processes, and resultant judgment accuracy may be valuable to experts in this domain.
AB - Since the 1980s, researchers and practitioners examining the vulnerabilities of financial institutions to money laundering risk have offered some insights on how experts conduct anti-money laundering risk assessments. A common theme in the risk assessment literature is the emphasis on box-ticking rather than exercising judgment case-by-case, which has influenced our consideration of whether experts in this domain are immune to cognitive biases that novices can be vulnerable to during risk assessment. We found that both experts and novices were overconfident about their distribution judgments and this effect was slightly more pronounced in the expert group. One manifestation of the overconfidence effect in both groups was the preference for false-positive over false-negative errors. Notably, novice participants slightly outperformed expert participants in the proportion of correct outcomes. A feedback mechanism that is effective at alleviating biases, improving processes, and resultant judgment accuracy may be valuable to experts in this domain.
KW - Anti- money laundering
KW - Bias
KW - Expertise
KW - Financial institutions
KW - Overconfidence
KW - Probability judgment
UR - http://www.scopus.com/inward/record.url?scp=85151296381&partnerID=8YFLogxK
U2 - 10.1016/j.jbusres.2023.113820
DO - 10.1016/j.jbusres.2023.113820
M3 - Article
SN - 0148-2963
VL - 162
JO - Journal of Business Research
JF - Journal of Business Research
M1 - 113820
ER -