Factors Influencing Adoption Of Anti Money Laundering Regulations By Commercial Banks In Kenya

Abstract

The objective of this study is to investigate the factors influencing adoption of antimoney laundering regulations by commercial banks in Kenya. The specific objectives of the study were: To determine the influence of legal enforcement mechanisms, institutional capacity, international cooperation and technological advancements on the adoption of anti-money laundering regulations by commercial banks in Kenya. The study adopted descriptive design and the target population was 42 commercial banks in Kenya. A sample of 84 respondents (two managers from each bank) was used in this study. Selfadministered questionnaires were used to collect primary data which was later analyzed using descriptive statistics and multiple regression analysis. The study found that commercial banks are faced with money laundering problems. However, the banks have implemented the anti-money laundering policies to a great extent. Legal enforcement mechanisms, institutional capacity, international cooperation and technological advancements affect the adoption of AML regulations in their banks to great extents. The study concludes that legal enforcement mechanisms contributes more to the increase of adoption of AML regulations in commercial banks followed by technological advancements, then international cooperation while institutional capacity contributes the least to the adoption of AML regulations in commercial banks. The study recommends that there is need to strengthen the legal enforcement mechanisms on the adoption money laundering regulations. The banks management should offer staff training on anti-money laundering issues. There is need to monitor keenly the online services and exercise of oversight by jurisdictions chartering internet banking. There is need to develop and adopt use of advanced technologies to enhance adoption of AML regulations.