Introduction

In light of rapid economic transformations and growing technological advancements, financial crimes have become more complex and multifaceted, most notably money laundering, which poses a real threat to the stability of financial and banking systems worldwide. This crime no longer relies on traditional methods but now exploits modern technologies, digital systems, and complex financial networks to conceal the sources of illicit funds and give them a veneer of legitimacy. Banks, as the cornerstone of this system, are particularly vulnerable The financial system, as a whole, occupies a highly sensitive position, bearing a significant responsibility for detecting and combating money laundering operations. However, this role faces numerous challenges, ranging from the continuous evolution of money laundering methods and weaknesses in some oversight systems to, at times, conflicts of interest within the financial institutions themselves. Hence, the importance of technical oversight within banks becomes paramount; it is no longer a supplementary option but an absolute necessity to keep pace with this escalating challenge. Adopting smart systems is therefore crucial. dvanced data analysis and the development of human competencies capable of dealing with these technologies represent the first line of defense against this phenomenon.

Chapter one

First: The Research Problem

The research problem lies in the increasing complexity of money laundering operations in light of rapid technological advancements, and the accompanying challenges banks face in detecting and mitigating these operations. Although some banks rely on technological control systems, these systems may suffer from deficiencies or insufficient efficiency to keep pace with the modern methods used by money launderers. Another problem arises from the potential weakness in the application of compliance procedures or laxity in their implementation. The oversight within some banking institutions may contribute, directly or indirectly, to the passage of some suspicious transactions.

Second : Importance of the research

The research also highlights the vital role of technical oversight within banks, given the rapid technological advancements that money launderers have exploited to develop their methods. Therefore, strengthening technical and oversight systems has become an urgent necessity to address these challenges .

Third : The Purpose of the Research

Understanding the concept of money laundering and its modern methods in light of technological development, and explaining the role of technical oversight in banks in detecting and preventing money laundering operations .

Fourth: Research Hypotheses

There is a statistically significant correlation and effect between technical controls and money laundering operations .

Fifth: Research community and sample

The research community consists of banking sector employees, with a focus on staff at the National Bank of Iraq, particularly those working in compliance, internal audit, and information technology departments, given their direct role in monitoring financial operations and detecting money laundering. The following academic qualifications were considered, as they were the most likely to respond to the questionnaire. The sample size was determined from among 90 employees at the bank under study According to the D. Morgan global model (Al-Azzawi, 2017), (73) questionnaires were distributed, and (3) questionnaires were excluded due to their inadequacy for statistical analysis. Thus, the number of valid questionnaires that underwent statistical analysis became (70) questionnaires, or (96%), of the total distributed forms, which is an acceptable percentage for conducting statistical analysis.

Sixth: Sources of Data and Information Collection

In order to achieve the research objectives, information was collected based on theoretical and academic sources, as we can rely on all our local, Arab and foreign sources, including scientifically rigorous research and studies, books and a number of published research papers on the topics of the study. The questionnaire was adopted in the practical aspect

Chapter Two / Theoretical Review

First: The concept of technical control

It is a tool of economic and social control that is carried out through closed digital systems with multiple algorithms that rely on collecting and analyzing big data, which leads to directing behavior and making influential decisions without transparency or accountability (Pascual, 2015 ).

Steven, et al., 1996: 1-2 defined it as: the use of modern technical methods and means to monitor activities and transactions within the organization, in order to achieve savings in effort, time, and cost, and to reach results with the least possible risk.

As defined by Gail et al. (2004: 37-38): It is the use of modern methods within an organization to monitor economic activities and transactions

As defined by Johnston & Cheng (2002: 2-3): It is the process of monitoring daily job performance through modern devices deployed in the workplace, which aims to protect the organization's interests. This process is carried out using modern technological means.

From these definitions, we conclude that technical control is: a process aimed at monitoring and observing the activities, transactions, and performance of employees in the organization, with the aim of detecting deviations through the use of computers and modern technical means, in order to achieve the desired goals, to create a work system with a high competitive advantage .

Second: Technical control infrastructure

This refers to both the physical and human components, primarily consisting of preparing the technical requirements for software, data processing, electronic networks, and database management, in addition to human resources such as programmers, analysts, and systems engineers

The requirements for the technical control infrastructure are (Al-Diqa, 2000: 25), (Abdul Wahab, 2006: 56 ) .

1- Organizational Requirements: These consist of the ability to achieve interaction between the physical and human components necessary for effective technical control

2-Technical Requirements of a Modern Control System: These consist of the equipment and modern technologies required for successful technical control, through which data and information are represented and transmitted electronically, ensuring their accuracy and confidentiality using electronic networks, while also guaranteeing their validity and reliability. (Al-Khalidi, 2007: 74 ) .

Third: Characteristics of Technical Control

Gail et al. (2004:2-3) identified the most important characteristics of technical control as follows :

1.Technical control can minimize surprises, identify deviations as they occur, and provide electronic alerts through the monitoring software used, eliminating the need for human intervention.

2.Technical control enables the effective use of information systems and provides a database of information on the performance and activities of executive bodies, readily available when senior management needs to make a decision.

3.Technical oversight is a fundamental element in establishing a work system that focuses on aspects affecting the performance of executive bodies within the organization, which are crucial to the organization's success.

4.Technical oversight promotes transparency for executive bodies, leading to greater clarity regarding their activities for oversight agencies.

5.Technical oversight is a modern method for addressing problems arising from technological advancements in detecting workplace misconduct and data leaks.

Fourth: The Concept of Traditional Control

Control is one of the main management functions, which consists of (planning, organizing, directing, and controlling). Robbins (2021) defined it as the process of monitoring activities to ensure that they are carried out as planned and correcting any significant deviations. Dr. Ahmed Maher defined it as ensuring that implementation is carried out as planned by measuring actual performance and comparing it to planned performance and taking the necessary actions to correct any deviations (Ahmed Maher, 2012 ).

Fifth: Control Steps

Control includes the following steps :

1.Setting objectives and comparing them with the work performed

2.Examining actual performance to ensure (identifying deviations between actual performance and established standards, and ensuring that performance is carried out according to predetermined standards).

3.Evaluating results by analyzing deviations and identifying their causes for the purposes of (assigning responsibility for them, reinforcing and supporting positive aspects of performance, and identifying problems hindering performance to contribute to achieving the levels specified by the standards) (Mashal, 2004). )

Sixth: The Central Bank's Responsibility in the Supervision and Control Process

The supervisory procedures followed by the Central Bank in the supervisory process of banks are defined by the laws that govern its work and its instructions and by the monetary policy it follows. It operates through the board of directors of banks, their executive management, their internal audit departments, or the control systems through which they operate. Perhaps the Central Bank's responsibility here lies in protecting the interests of the plaintiffs through its portfolio of the stability and consistency of the banking system and ensuring that banking institutions comply with the regulations and instructions.

Seventh: Central Bank Supervisory Control Tools

1.Off-Site Control: This is one of the most important control methods exercised by the Central Bank. It involves examining and analyzing performance reports and data. The Central Bank also monitors the annual reports prepared by the auditors of banks to ensure the implementation of its decisions and the absence of any violations in the banks' activities. Furthermore, banks are required to provide the Central Bank with accurate information and statistical reports that shed light on both on- and off-balance sheet items.

2.Field Supervision (Inspection): To ensure that the bank is conducting its business in accordance with the applicable laws and regulations, and to verify the accuracy of the data provided to the Central Bank, as stipulated in (Article 53/Third) of the Iraqi Banking Law No. 94 of 2004.

3.CAMELS Standard for Evaluating and Classifying Banks: The results shown by the use of this standard in revealing the defects in banks and assessing their banking soundness have been demonstrated. This standard has also proven its ability to determine the degree of risk to which the bank is exposed before it is revealed through the market and price mechanism. The results of the CAMELS standard analysis were included with the annual data disclosed by the bank to the public, which leads to achieving a high degree of transparency that helps in adhering to market discipline .

4.Reviewing the auditors' reports: The bank is audited by an external auditor chosen by the General Authority and approved by the Central Bank, which reviews the bank's accounts in accordance with the customs and rules of the auditing profession in general, some national legal texts and instructions, and the decisions of the senior management for disbursement. The bank's financial statements are audited to obtain reasonable assurance as to whether the financial statements as a whole are free from material misstatements, whether arising from fraud or error, and that they have been prepared in all respects in accordance with the framework for preparing financial statements in force, and then to express an opinion on the fairness of the published financial statements and whether they reflect its activity for the financial period in which they were prepared. The Central Bank is keen to communicate and meet with the auditors continuously to discuss the bank's financial situation and keep up with developments in accounting standards (Samir, 2018).

Eighth: The concept of money laundering

Money laundering is defined as the process of transferring funds resulting from illegal activities in order to conceal their illegal source or to help money launderers avoid legal liability resulting from holding funds from this illegal activity.

Banks have become the most targeted channel for money launderers to carry out money laundering operations in order to legitimize their funds of a criminal or legally unacceptable source. The operations are carried out through them through complex, fast and advanced banking techniques, especially their reliance on the technological revolution to develop their banking tools. Because of what the rules on which banking work is based, especially the rule of banking secrecy, facilitate the completion of money laundering operations without revealing the identity of the perpetrator, the banks themselves are considered a fundamental pillar in combating money laundering activities in order to protect themselves from financial and legal risks and the risk of losing customer confidence (Sulaiman, 2010).

Ninth: Stages of Money Laundering

1.The first stage: The investment of funds: In this stage, the person laundering money introduces the illicit proceeds into the financial system by investing those funds in transactions through official financial institutions and projects such as restaurants, casinos, and other legitimate local and international financial and commercial activities.

2.The second stage, layering: This involves separating illicit proceeds from their sources through a series of financial transactions aimed at concealing the origin of the proceeds. It includes converting the proceeds of crime into another form and creating complex transactions to hide the source and ownership of the funds. (Abdulaziz, 1999).

3.The third stage, integration: This involves giving apparent legitimacy to illicit wealth by injecting it into assets such as real estate, artwork, jewelry, and luxury cars. (FATF, 2005).

Tenth: Money Laundering Tools

1.Illicit Trade: This includes the trade of drugs, unlicensed weapons, substandard pharmaceuticals, and other illicit goods.

2.Utilizing Financial Institutions: These institutions facilitate money laundering by providing a legal cover for their financial activities.

3.Real Estate Leasing: This involves investing illicit funds in real estate projects that purchase properties and then lease them to individuals and institutions, thus replacing illegal funds with legitimate ones.

4.Loans: Providing illegal funds as loans and then collecting interest on the principal after a specified period.

5.Internet Technology: Converting illegal funds into other financial investments such as stocks and bonds through websites that act as financial intermediaries, thus facilitating the illicit investment process. (Rabab, 2019).

Chapter Three: The Practical Aspect

First: Reliability

To verify the reliability of the research instrument, Cronbach's alpha coefficient was calculated to ensure the reliability of the measurement tool. Although there are no standard rules regarding appropriate alpha values, in practice, an alpha greater than or equal to 0.60 is considered acceptable in research related to administrative and human sciences. (Al-Jadiri & Abu Helou, 2009: 171). Table (1) shows the test results

Source: Data compiled by the researcher based on the output of SPSS V.25.

The table shows that the reliability coefficient for all variables of the study instrument reached (0.951), and at the level of the variable (technical control) it reached (0.875), and at the level of the variable (money laundering operations) it reached (0.868). This means that Cronbach's alpha values ​​indicate the existence of a high degree of consistency and correlation between the items of the single subdomain scale and the items of the main domain, as well as for the research instrument as a whole, since the percentages exceed the statistically acceptable percentage of (60%), in other words, the indication of the possibility of the reliability of the results that may result from applying the questionnaire .

Second: Descriptive analysis of the data from the banks under study

(First): The Technical Control Variable (X)

This variable in the questionnaire consisted of ten items to measure (technical control). We note from the results of the phenomenon in Table (1) that the overall arithmetic mean of the variable reached (4.27), which is a good rating, between the hypothetical weight (4.2-5), and a relative importance of (88.20), at a high rating level. What confirms this result is the standard deviation and the coefficient of variation for the variable as a whole, which reached (0.32) and (11.73) respectively, which indicate a low dispersion of less than one, meaning that there is convergence and homogeneity in the viewpoints of the individuals surveyed from the research sample. This result confirms the importance of technical control in the work of the banks under study and its impact on money laundering operations.

Table (3) Statistical indicators for the technical control variable

Figure 1.

Figure 2.

( Second): The Money Laundering Operations Variable (Y )

We note from the results of the phenomenon in Table (4) that the overall arithmetic mean of the variable reached (4.17), which is a good rating, between the hypothetical weight (3.4 - 4.19), and a relative importance of (82.96), at a good rating level. This result is confirmed by the standard deviation and the coefficient of variation for the variable as a whole, which reached (0.51) and (12.32) respectively, which indicate the low dispersion of less than one, meaning that there is convergence and homogeneity in the views of the individuals surveyed from the research sample. This result confirms the importance of the efficiency of banking operations in the work of the organization under study. This result indicates that the operations to avoid and control money laundering enable the bank under study to maintain its financial position.

Table (4) Statistical indicators for the money laundering operations variable

Figure 3.

Third: Testing the correlation and influence relationships between the research variables

1.The first main correlation hypothesis: (There is a statistically significant correlation between technical control X and money laundering operations Y)

We note from the results of Table (5) that there is a statistically significant correlation between technical control and money laundering operations, as the correlation coefficient reached (0.754**) at a statistical significance level of (0.000), which is less than the significance level of (0.01). This positive relationship in the correlation coefficient indicates the direction of the direct relationship between the two variables. This result is interpreted as the bank under study uses technical systems capable of detecting abnormal patterns in financial transactions. These results confirm and accept the hypothesis which states (There is a statistically significant correlation between technical control X and money laundering operations Y).

Table No. (5) Correlation between Technical Control X and Money Laundering Operations Y

2.The first main effect hypothesis of the research (there is a statistically significant effect relationship of technical control in money laundering operations).

Table (6) shows that the calculated F-value for the linear regression model was (255.151), with a significance level of (0.000), which is less than the significance level of (0.01). This indicates the stability of the regression coefficients and that the change in (technical control) directly affects (money laundering operations). This means that the hypothetical model under investigation is significant, i.e., the selection of (technical control) as an independent variable was a correct choice. These results provide sufficient support for accepting the hypothesis that (there is a statistically significant relationship between technical control and money laundering operations).

Figure 4.

Chapter Four: Conclusions and Recommendations

First: Conclusions

1. The statistical analysis revealed a statistically significant correlation and impact of technical controls on money laundering operations at the bank under study.

2.The statistical results showed that financial transactions are monitored continuously within the bank.

3.The statistical results indicated that the current control systems at the bank under study require development.

4.The research results showed that the technical systems used provide immediate alerts in the event of suspicious transactions.

5.The statistical results showed that the technical systems are capable of detecting abnormal patterns in financial transactions.

6.The statistical analysis revealed that the bank under investigation has clear anti-money laundering policies.

7.The research findings indicated that senior management supports anti-money laundering efforts.

8.The statistical analysis showed that the bank under investigation adheres to anti-money laundering laws and regulations.

9.The statistical results indicated that the bank under investigation provides training courses on anti-money laundering.

10.The research findings indicated that work pressure may lead to the failure to notice suspicious transactions.

Second: Recommendations

1.Assisting employees in acquiring sufficient knowledge to use electronic systems for detecting suspicious transactions.

2.Enrolling employees in training courses to enhance their awareness of risks.

3.Establishing clear policies by the bank under investigation to combat money laundering.

4.Ensuring the competence of specialized technical personnel, as a shortage of such personnel could negatively impact the effectiveness of anti-money laundering efforts.

5.Continuously developing the technical control systems the bank needs to combat money laundering.

6.Securing support from the bank's senior management for anti-money laundering efforts.

Implementing clear procedures for reporting suspicious transactions. .7

8.Ensuring the bank's compliance with anti-money laundering laws and regulations.

9.Providing training courses by the bank under investigation on anti-money laundering.

10.Helping to reduce the workload that leads to the detection of suspicious transactions.