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To implement a risk-based regulatory approach, this paper aims to make an assessment on customers' money laundering risk and conducts some applications.
Abstract
Purpose
To implement a risk-based regulatory approach, this paper aims to make an assessment on customers' money laundering risk and conducts some applications.
Design/methodology/approach
During the transition of a regulatory approach from “rule-based” to “risk-based”, this paper considers that the area of a customer, types of business and the industries to which the customer belongs are the main indicators to judge money laundering risk of a customer. Based on the statistical analysis of 221 typical money laundering cases, first-class index weights are given by using the entropy weight method and then by combining with the membership function, this paper determines a customer’s money laundering risk levels. On the basis of the entropy weight method, this paper uses the C5.0 algorithm to construct a decision tree model and then carries out application research on customer money laundering risk assessment to verify the effectiveness of the entropy weight method and the decision tree model.
Findings
This empirical research found the weights of three key money laundering indicators: customer areas, business types and corresponding industries.
Originality/value
Asserting that current money laundering risk assessments of customers are marginal at best, this paper contends from the perspective of practice, and applies the entropy weight method and the decision tree model for money laundering risk assessment of customers.
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Zuraidah Mohd-Sanusi, Yusarina Mat-Isa, Ahmad Haziq Ahmad-Bakhtiar, Yusri Huzaimi Mat-Jusoh and Tarjo Tarjo
This study aims to examine the direct and indirect effects of professional commitment, customer risk and independence pressure on money laundering risk judgment among bank…
Abstract
Purpose
This study aims to examine the direct and indirect effects of professional commitment, customer risk and independence pressure on money laundering risk judgment among bank analysts.
Design/methodology/approach
This study uses a within-subjects experimental research design and collects primary data via a questionnaire distributed to bank analysts in banking institutions in Malaysia.
Findings
Results show that professional commitment, customer risk and independence pressure significantly influence money laundering risk judgment (i.e. customer due diligence and money laundering reporting). The results also show significant interaction effects between customer risk and independence pressure in influencing money laundering risk judgment.
Practical implications
Professional commitment and situational factors are crucial in putting pressure on bank analysts responsible for performing a thorough check and due diligence to minimize money laundering risk to the bank.
Social implications
As money laundering is lifeblood of crimes, understanding the factors influencing money laundering risk judgment would assist the affected institutions to manage the risk better and contribute towards the fight against crimes.
Originality/value
This study focuses on money laundering risk judgment. It contributes to understanding the competency of the gatekeepers, such as bank analysts, in practicing professional commitment and dealing with situational factors.
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Uzay Damali, Enrico Secchi, Stephen S. Tax and David McCutcheon
Customer participation (CP) has received considerable interest in the service literature as a way to improve the customer experience and reduce service providers' costs. While its…
Abstract
Purpose
Customer participation (CP) has received considerable interest in the service literature as a way to improve the customer experience and reduce service providers' costs. While its benefits are not in question, there is a paucity of research on potential pitfalls. This paper provides a conceptual foundation to address this gap and develops a comprehensive model of the risks of customer participation in service delivery, integrating research from the marketing, operations and supply chain management, strategy, and information technology fields.
Design/methodology/approach
The model is derived deductively by integrating insights from research in marketing, operations and supply chain management, strategy, and information technology.
Findings
This paper identifies three categories of potential risks of CP (i.e. market, operational, and service network) and discusses ways that firms can mitigate these risks. Building on the model, it develops a CP risk assessment tool that managers can use when evaluating increases in CP.
Research limitations/implications
The conceptual model proposed in this paper can serve as a robust basis for future research in customer participation, particularly in such areas as sharing economy services, service delivery networks, and experiential services. The risk assessment tool offers clear guidelines for managers who are considering an increase in customer participation in their service.
Originality/value
This is the first attempt to conceptually define customer participation risk and develop a comprehensive model of its drivers and strategies to mitigate it. This paper develops a straightforward method for managers to evaluate CP risk.
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Emerson Wagner Mainardes, Aridelmo Teixeira and Paula Cristina da Silveira Romano
The purpose of this paper is to identify the factors that favor the activity of co-creation with customers in the banking sector. The way in which consumers co-create with banking…
Abstract
Purpose
The purpose of this paper is to identify the factors that favor the activity of co-creation with customers in the banking sector. The way in which consumers co-create with banking organizations was also examined.
Design/methodology/approach
The “dialogue, access, risk and transparency” model was employed with the variables dialogue, access, risk assessment and transparency, as per Prahalad and Ramaswamy (2004). The final data sample accounted for 265 clients of a large Brazilian bank and multiple linear regression was used to analyze the data.
Findings
The results indicated a significant and positive association with access, risk assessment and transparency when the bank co-created with these clients. Dialogue did not appear significantly affect to the co-creative process between clients and the bank.
Research limitations/implications
The study was conducted with customers of only one major Brazilian bank. The authors recommend that the same study is conducted in other retail banks, investment banks and smaller banks, with a specialized focus. Limitations notwithstanding, the outstanding findings of this research relate to customer perceptions, which, it should be noted, do not necessarily reflect the totality of the relationship between client and bank.
Originality/value
Understanding co-creation in the banking sector is a new learning perspective on consumer behavior and interactions within the service production process. The justification and relevance of this study derive from the construction of this knowledge and the scarcity of empirical work in this area.
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The aim of this paper is to describe the most important occupational risks in maintenance operations.
Abstract
Purpose
The aim of this paper is to describe the most important occupational risks in maintenance operations.
Design/methodology/approach
This study analyzed all maintenance‐related fatalities since 1985 together with one group of severe accidents in Finland. In connection with the study, risk assessments were carried out in companies with the aim of charting the risks on sites.
Findings
The results indicate that the typical risks in maintenance operations involve poor ergonomics and that the most severe risks among these can lead to direct injury. Severe or even fatal injuries are mainly caused by crushing or falling.
Practical implications
To manage the risks, maintenance operations should be taken more carefully into account when designing and reconstructing machinery and work environments. It should be ensured that workers have relevant safety knowledge by means of risk assessments and instruction in safe working practice. In addition, safety cooperation with the customer is essential.
Originality/value
The findings indicate that maintenance operations include certain occupational risks. Among such risks, subcontracting offers a specific challenge to the service provider's safety management. The findings of this study provide advice on the safety measures necessary for accident prevention and how to execute them.
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Seyedeh Khadijeh Taghizadeh, Syed Abidur Rahman and Malliga Marimuthu
The purpose of this paper is to examine the influence of the dialogue, access, risk assessment and transparency model of value co-creation processes (dialogue, access, risk and…
Abstract
Purpose
The purpose of this paper is to examine the influence of the dialogue, access, risk assessment and transparency model of value co-creation processes (dialogue, access, risk and transparency) on new service market performance (NSMP) with the mediating role of value-informed pricing in the context of business-to-business (B2B).
Design/methodology/approach
The data were collected through a cross-sectional survey of 230 managers of the telecommunications industry in Malaysia and analyzed through structural equation modeling using SmartPLS v.3.3.3 software.
Findings
This study found that dialogue and transparency are predictors of NSMP. The findings indicate that value-informed pricing plays a mediating role in the relationship between dialogue and transparency with NSMP.
Practical implications
Disclosing pricing related information, providing up to date information to the customers, making clear to the customers about new offerings would certainly influence value-informed pricing. Thus, managers can enhance customer engagement in the interaction processes to better understand customer expectations of new services and how the new services should be priced.
Originality/value
The link between value co-creation and value-informed pricing has been only conceptualized in literature. This study has opened a new stream of research, examining the relationship of interactional-based value co-creation process with value-informed pricing and NSMP in the context of B2B relationship from providers’ perspective.
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Inga-Lill Söderberg, James E Sallis and Kent Eriksson
The purpose of this paper is to use psychological theory to improve our understanding of financial advice-taking. The paper studies how a working alliance between financial…
Abstract
Purpose
The purpose of this paper is to use psychological theory to improve our understanding of financial advice-taking. The paper studies how a working alliance between financial service customers and advisors affects the advisor's assessment of the financial service buyer's perceived risk preferences, and what role trust plays as a mediating variable.
Design/methodology/approach
The paper obtained data by means of a questionnaire that was answered by 375 matched pairs of bank advisors and customers.
Findings
This paper explains how the working alliance method – a concept from psychotherapeutic theory – between financial service customers and advisors affects the advisor's understanding of the financial service buyer's perceived risk preferences. The paper also finds that the role of trust is perceived differently by the advisor and the customer. Advisors see that as their clients learn to trust them they lose touch with the customer's perceived risk preferences, whereas customers do not perceive that their trust in the advisor has any relationship to their risk preferences.
Practical implications
This results suggest that advisors lose touch with the risk preferences of trusting customers, and that psychological methods are needed if the advisor should actually understand customer perceived risk preferences.
Originality/value
The paper advances psychological methods in marketing, and provides a partial answer to the difficulties of financial advice giving.
Simarpreet Kaur and Sangeeta Arora
This paper aims to revisit the role of perceived risk in online banking, using an alternative view on trust as a moderator on the relationship between perceived risk and…
Abstract
Purpose
This paper aims to revisit the role of perceived risk in online banking, using an alternative view on trust as a moderator on the relationship between perceived risk and behavioral intention (BI). With this aim, the conceptual model was proposed to examine the impact of perceived risk on BI directly and indirectly via unified theory of acceptance and use of technology 2 along with its interactionist relationship with trust.
Design/methodology/approach
Structural equation modeling technique is used to analyze data collected from 677 bank customers via personal contact using a self-administered questionnaire.
Findings
The results indicate that perceived risk as a multi-dimensional construct has a direct and indirect impact on BI via performance expectancy, social influence, hedonic motivation and price value. Moreover, it was found that trust moderates the relationship between perceived risk and BI.
Practical implications
This study suggests that banks should create a trust-building mechanism in the online banking environment and develop certain risk management strategies such as providing detailed and thorough information, money-back guarantee and reassurance services to enhance confidence among the customers to use such services. The banks should also devote valuable efforts in designing website interface with improved security features to facilitate usability and reliability of online banking services.
Originality/value
The present study makes an important contribution to the existing literature on e-commerce, especially in the field of online banking, by proposing an interactionist model between perceived risk and trust. The proposed model has never been examined in the relevant literature and could be used to provide a solid theoretical foundation in the context of online banking adoption.
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Han Shen, Xinge Li and Yangfan Zhang
With the development of tourism industry, online travel agencies (OTA) have gradually become an important channel for tourism product supplies and sales. Some OTAs provide…
Abstract
With the development of tourism industry, online travel agencies (OTA) have gradually become an important channel for tourism product supplies and sales. Some OTAs provide consumers with a platform for tourism guidance and online travel sharing. They not only satisfy some tourists’ desire to share their experiences but also provide reference for more consumers to choose travel products. This process is the process of value co-creation by customers and online travel companies. This study is conducted under DART theory, a theoretical framework of value co-creation composed of four dimensions, namely dialog, access, risk-assessment, and transparency. Brand equity is divided into four aspects: brand loyalty, brand awareness, customer perceived value, and brand image. This study uses the structural equation model to investigate the impact of customer value co-creation behavior on brand equity of online travel enterprises and interprets the process and mechanism of customer value co-creation behaviors for online travel business brand equity, which provides more efficient strategies and methods for platform interaction and value co-creation.
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Thu Thi Hoai Tran and Louis De Koker
This study aims to consider the anti-money laundering/combating of financing of terrorism (AML/CFT) regime that applies to microfinance institutions (MFIs) and microfinance…
Abstract
Purpose
This study aims to consider the anti-money laundering/combating of financing of terrorism (AML/CFT) regime that applies to microfinance institutions (MFIs) and microfinance programmes and projects (MFPs) in Vietnam to identify ways in which to improve the alignment between financial inclusion and financial integrity objectives in relation to this sector.
Design/methodology/approach
This doctrinal study is informed by the Financial Action Task Force mutual evaluation methodology.
Findings
The AML/CFT regulatory framework for MFIs/MFPs is inadequate but improving. The money laundering and terrorist financing risks posed by microfinance are low and so is the capacity of many providers to comply with AML/CFT obligations. Given the low risk, there is space to simplify AML/CFT requirements for this sector in a manner that will better align financial inclusion and financial integrity policy objectives.
Research limitations/implications
This paper considers the implementation of AML/CFT obligations of MFIs/MFPs based on existing studies as well as own research relating to compliance and supervisory practices. Further empirical studies to determine for the whole microfinance sector could provide a more granular understanding of crime risks and compliance capacities in the sector.
Practical implications
AML/CFT regulators in Vietnam can take concrete steps to simplify the AML/CFT due diligence obligations of MFIs/MFPs and support these institutions to formalise and implement appropriate AML/CFT measures.
Social implications
MFIs/MFPs play a vital socio-economic role by providing financial services to the poor. Appropriate AML/CFT control measures can enable these providers to continue providing these services while strengthening economic formalisation and integrity goals of the government.
Originality/value
The paper provides novel supervisory perspectives on the AML/CFT regime in relation to MFIs/MFPs.
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