Finance Assignment: Banking Sector Vulnerabilities and AML/CTF

This report addresses two key questions in the finance sector. The first part focuses on the vulnerabilities within the banking sector, particularly in e-banking, and identifies common abuses such as phishing attacks and security breaches related to mobile apps and unsecured Wi-Fi. It then outlines key Anti-Money Laundering/Counter-Terrorism Financing (AML/CTF) controls used to mitigate these risks, including employee training, compliance officers, customer information gathering, and software implementation. The second part of the report examines the money laundering risk associated with asset finance, arguing that the risk is relatively low due to factors such as the nature of lease agreements and the use of bank accounts for payments. The report concludes by providing reasons to support the low risk assessment of money laundering in asset finance.

Running head: FINANCE
Finance
Name of the student:
Name of the university:
Authors note:

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Table of Contents
Answer 1:...................................................................................................................................2
Answer 2....................................................................................................................................3
Reference:..................................................................................................................................4

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Answer 1:
Technology is rapidly transforming every sector in the world. Banking industry is no
exception. The main challenge in the banking sector is ensuring the security. E- Commerce
sector is dominated by the challenge of security.
E Banking or online banking is the process of doing transaction on the go or at home
online. This type of service is offered by the banks for streamlining the services to the
customer’s easily. Thus, it can reduce the crowd in the banks every now and then (Lee,
Posenau and Stebunovs 2018).
Some of the vulnerabilities are mentioned below:
 There are certain cyber-attacks called phishing attack which enables the attackers to
get your private information by providing unauthorized link through email or SMS.
 Usually we got happy when we get free Wi-Fi, but this happiness may attract our
privacy of transaction. Sometimes free Wi- Fi are uncensored and when we connects
our phone or PCs with it the criminal may hijack our private information.
 Generally the banks instruct the customers to log in with the website which they have
provided. But people usually download the apps from mobile app stores which is a
security breach that the criminals take advantages.
 Sometimes the internal staffs who take care of the day to day may mislead the
information intentionally or unknowingly (Khrais 2015).
Sometimes the customers abuse the banks personnel for the vulnerabilities in the banking.
But there is no use of abusing the bankers because sometimes we use uncensored free Wi-Fi,
open unauthorized mails, links etc. which enables the hack the private information.

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Nevertheless E banking is very safe, we just need to be careful about few things that are
already stated in the points of vulnerabilities.
Anti-money laundering and counter terrorism financing are the new concepts of removing the
vulnerabilities. It helps to lower the risk exposure in every sector.
AMF/CTF programs are as follows:
 The employees should be engaged in the proper AML/CTF training process to have
awareness of the risks
 There should be an AML/CTF compliance officer at the management level to guide
the entire company against the malfunctioning.
 There should be a separate department, which will gather customer information
regarding any criminal activity. So that the company can take due steps to remove the
risks.
 The company should implement proper software to detect any malfunctioning.
Answer 2.
The feature of asset finance is such that money are not as a mode of advance to the
customers but on the other hand can be payable into bank account of the supplier in order to
fund the asset purchase as per availability as per contract to customer. Loan is not as an
impact of the borrower who receives money from lender but through asset use the transaction
at the initial stage is not related to money laundering. Asset finance do have a very low risk
related to money laundering (Hopton 2016).The reasons are
 As per pure lease agreement lease cannot take the asset’s ownership at the time and
duration of lease term.

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 Secondly through bank accounts and debit payments are generally collected as well as
payments in the form of ash are not considered during normal business course.
It is the duty of asset finance providers to carry with credit searches depending on the
business they do transact. Steps in order to verify and identify across all markets is required
as per present regulations of money laundering related to asset finance and it would meet
with low risk areas of money laundering (Bryans 2014).

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Reference:
Bryans, D., 2014. Bitcoin and money laundering: mining for an effective solution. Ind. LJ,
89, p.441.
Hopton, D., 2016. Money laundering: a concise guide for all business. Gower.
Khrais, L.T., 2015. Highlighting the vulnerabilities of online banking system. The Journal of
Internet Banking and Commerce, 20(3).
Lee, S.J., Posenau, K.E. and Stebunovs, V., 2018. The Anatomy of financial vulnerabilities
and banking crises. Journal of Banking & Finance.