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Examining Compliance Cost Challenges in Suspicious Transaction Reporting among Financial Institutions in Malaysia: A Concept Paper

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  • Aainaa Nazirah Binti Anuar

    (Bangkok Bank Berhad. Menara Berjaya Sentral, Jln Ampang, Kuala Lumpur, 50450 Kuala Lumpur, Wilayah Persekutuan Kuala Lumpur)

  • Siti Sarah Binti Saari

    (Yetkai Hospital Sdn Bhd. No.20A, Jalan Chung Thye Phin,30250 Ipoh,Perak)

  • Gustiani Rahmi Binti Abdul Khaidir

    (Feytech Holdings Berhad. 1, Jalan Bayu 2/6, Kawasan Perindustrian Tampoi Jaya, 81200 Johor Bahru, Johor Darul Ta'zim)

  • Yusri Hazrol Yusoff

    (Faculty of Accountancy, University Teknologi MARA, Cawangan Selangor, Kampus Puncak Alam, Selangor)

Abstract

Non-compliance with anti-money laundering (AML) laws and regulations, specifically in the timely submission of suspicious transaction reports, renders heavy penalties and unfavourable consequences for financial institutions (FIs) in Malaysia. As a result, FIs need to invest in high-cost compliance measures to mitigate the risk of regulatory breach. This paper aims to examine compliance costs challenges faced by FIs in the submission of high-quality suspicious activity reports, with the key area of concern including the demand for workforce expertise and enhancing technology for monitoring purposes. Additionally, this paper also explores the impact of non-adherence, which will cost FIs a hefty monetary penalty amount that adds to the potential compliance cost faced by FIs.

Suggested Citation

  • Aainaa Nazirah Binti Anuar & Siti Sarah Binti Saari & Gustiani Rahmi Binti Abdul Khaidir & Yusri Hazrol Yusoff, 2025. "Examining Compliance Cost Challenges in Suspicious Transaction Reporting among Financial Institutions in Malaysia: A Concept Paper," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 9(11), pages 919-928, November.
    • Handle: RePEc:bcp:journl:v:9:y:2025:i:11:p:919-928
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