Title:
Assessment of Anti-Money Laundering Practices on Financial Crime Prevention Among Commercial Banks in Kenya

Authors:
Patrick Maweu, Prof. David Kiragu, Dr. Allan Kuria., Kenya

Abstract:

Commercial banks are instrumental to socio-economic development of any Country. In Kenya, the banking sector contributes approximately 5% of Gross Domestic Product. These institutions provide among others; reliable payment system and access to credit to individuals, corporate and government(s). However, they are a target for many economic crimes including money laundering schemes. This study examined the anti-money laundering practices and financial crime prevention among commercial bank in Kenya. The study adopted a descriptive research design.  The sampling frame and unit of analysis was the 39 commercial banks in Kenya (CBK, 2023). The unit of response was 117 managers of these 39 commercial banks. Primary data was collected using a close-ended questionnaire for the predictand and the response variable.  In order to assess the internal consistency of the instrument, a pre- test was carried out using managers of three Micro Finance Banks in Nairobi, Kenya. Multiple linear regression was used for inferential analysis after testing the data for Gaussian distribution, linearity and autocorrelation and multicollinearity. The study found that 33.1% of the variations in financial crime prevention could be explained by anti-money laundering practices and that they had a statistically significance influence of financial crime prevention. The study recommended that commercial banks review the anti-layering practices and anti-integration practices as they do not appear to support financial crime prevention. These among others will provide a mechanism of enhancing financial crime prevention among commercial bank and hence reduce exposure arising from anti-money laundering practices trends currently experienced in the banking sector in Kenya.

DOI: https://doi.org/10.51505/IJEBMR.2024.8821