Effectiveness of Anti-Money Laundering (AML) Systems in Emerging Economies

Dr. Priyanka Jain

Guest Faculty, Department of Accountancy and Business Statistics, University College of Commerce & Management Studies, Mohanlal Sukhadia University, Udaipur

Priyankanjain23@gmail.com

Abstract:The effectiveness of Anti-Money Laundering (AML) systems in emerging economies is a critical factor in safeguarding financial stability, promoting transparency, and combating illicit financial flows. Limited institutional capacity, insufficient regulatory enforcement, high levels of informality, and the quick digitalization of financial services are some of the particular difficulties emerging economies face while implementing AML. There are still gaps in legislative frameworks and actual enforcement, despite the fact that many nations have embraced worldwide AML standards established by organizations like the Financial Action Task Force. System efficiency is frequently decreased by poor agency coordination, a shortage of qualified workers, and inadequate usage of cutting-edge technologies. Promising advancements can be seen in recent reforms, capacity-building programs, and the use of fintech-based monitoring systems. In order to effectively detect, prevent, and prosecute money laundering activities in a globalized financial environment, this study looks at the advantages and disadvantages of AML systems in emerging economies. It emphasizes the need for improved technological integration, stronger governance, and international cooperation.Keywords: AML, Financial, FIU