Herrera-Vargas, Antonio

t.a.herrera-vargas@lse.ac.uk

The Institutionalisation of Anti-Money Laundering Regulations in the Banking System: A Latin American Experience

(2004)

In the wake of 9/11 anti-money laundering (AML) regulation has increased in scope and depth around the globe in several jurisdictions. Governments require businesses established within their territory to take part in the prevention and detection of money laundering activities. Drawing on an ontological socio-constructivist viewpoint, an interpretive stance as an epistemological approach, and informed by neo-institutional theory, this research explores and examines the process of institutionalisation of AML regulations in the banking system of a Latin American country. The research argues that such institutionalisation is an ongoing process which takes place by means of ideals, discourses and techniques of control. Additionally, this work seeks to contribute to an increase in understanding of the socio-organisational issues, dynamics and implications to information systems security (ISS).

The research findings suggest that government regulatory and supervisory authorities and banking organisations have been reacting and adapting their organisational structures and practices to comply with “minimal” requirements set by local and international institutions. Hence their actions are legitimised at both national and international fronts. In doing so, an institutional AML field emerged. Nevertheless, it seems that these organisations guard their reputation neglecting the intention of controlling the exploding money laundering phenomenon; which has embedded consequences to ISS including White Collar Crime, reputational risk and privacy. Although the research highlights the local environment, it deals with processes that are occurring in many organisations and institutions in various countries across the world. This is due to the impact of the international AML regime and the diffusion of Information Communication Technology.

The research makes a theoretical contribution by proposing neo-institutional theory for understanding and studying AML regulations in the banking system. The primary audience for this dissertation is interpretive Information Systems (IS) researchers, particularly ISS ones, and can also be of relevance to interpretive researchers in other social science fields. Moreover, this research can be of relevance to practitioners involved in the AML area. The dissertation furthers offers methodological insights and approaches that can inform future IS and ISS researchers exploring the financial services industry. Finally, the insights and reflections gained from this research could be used in the process of theory building in the fields of IS and ISS.

Supervisor: James Backhouse, PhD

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