NCJ Number
208778
Journal
Journal of Financial Crime Volume: 12 Issue: 2 Dated: December 2004 Pages: 139-143
Date Published
December 2004
Length
5 pages
Annotation
This paper discusses the criteria and processes that would make it possible to combat financial crime through the analysis and modeling of behaviors.
Abstract
A "model" is a simplified picture used to describe and interpret phenomena that occur in a complex way. Models facilitate the selection and collection of vast quantities of data and guide the organization of knowledge into synthetic forms. To apply modeling to the financial system and the opportunities therein for conducting illicit activity, the operational goals to be achieved must first be defined. The model must facilitate the monitoring of the structure and functions of the system by observation and interpretation of the behaviors of key parties. The model must also specify the kinds of information needed to detect anomalies and alarm signals in the system's operation. In implementing the model to achieve its goals, data and information must be obtained on all aspects of the system's functioning and the activities of its players. Numerous disciplines provide a range of knowledge and techniques that can be used to link and interpret this universe of data. This paper describes the various arenas that can be drawn upon to inform the collection and interpretation of data. These are legal-framework analysis and organizational analysis, the professional expertise of the various players, economic analysis that reveals the economic mechanisms and the system of incentives that guide the behavior of different players, sociological studies of phenomena related to financial crime, and statistical analysis of behavior. These approaches produce a three-pronged kit of instruments: a map of possible transactions, a dataset that can be organized heuristically for modeling, and a range of criteria for behavioral motivation.