Assessment of Banks Activities on Risk Control of Clients in the Financial Monitoring System

Current legislation requires banks to continuously monitor all financial transactions of their customers - both legal entities and individuals. However, despite penalties, in the form of multimillion fines and written warnings most Ukrainian banks do not meet the requirements of the National Bank of Ukraine for development, approval and implementation of internal documents on financial monitoring. The purpose of the article is to summarize the practical experience of the banks in compliance with the policy of risk control of the bank's clients in the financial monitoring system. The sample of this study is 75 Ukrainian banks. The internal documents of existing Ukrainian banks on issues of internal bank financial monitoring were analyzed. The components of the risk control policy of the bank's clients were selected and the information on the completeness of the risk control policy of the bank's clients in the existing banks of Ukraine was summarized. The completeness of the risk-control policy of the bank's clients is determined at thefollowing stages: grouping of components of the risk-control policy of the bank's clients; clustering of Ukrainian banks according to the level of completeness of the bank's clients risk control policy. The method of cluster analysis identified groups of banks for the level of full risk-control of their clients. The four clusters with certain asymmetric distributions in their banks were identified. According to the results of generalization of practical experience of banks in compliance with the risk control policy of the bank's clients in the financial monitoring system, namely internal documents of existing banks on internal financial monitoring, it was found that some banks did not have actually developed internal policies or rules on compliance with the requirements of risk control legislation in the field of financial monitoring.