Project

Back to overview

Argumentative practices adopted by Swiss banks for reconciling AML&CTF supervisory duties with the fiduciary obligations towards the client. An interdisciplinary approach combining the juridical, the economical and the argumentative dimensions.

Applicant Rigotti Eddo
Number 130652
Funding scheme Interdisciplinary projects
Research institution Istituto Media e Giornalismo Facoltà di Scienze della comunicazione Università della Svizzera italiana
Institution of higher education Università della Svizzera italiana - USI
Main discipline Communication sciences
Start/End 01.12.2010 - 30.11.2013
Approved amount 298'994.00
Show all

All Disciplines (3)

Discipline
Communication sciences
Economics
Legal sciences

Keywords (14)

AML complex; argumentation; banks; decision-making processes; compliance office; conflict of duties; money laundering; relationship banking; suspicious activity report; suspicion; trust; compliance; communication; confidentiality

Lay Summary (English)

Lead
Lay summary
The legislation combating money laundering and terrorism financing (AML&CTF laws) has brought banks in front of a dilemma: by the contract of mandate set with their client, banks have the duty to be fully committed to his best interests, ensuring him the required transparency and confidentiality; on the other hand, following AML&CTF norms, banks have the duty to monitor their client and, in case of 'reasonable suspicions', to secretly denounce him, risking to compromise, in this way, the continuity of a transparent and confidential relationship. This conflict largely falls upon the individual banker who, on behalf of her banking institution, assumes both the task of constantly monitoring her client and the task of undertaking and maintaining a confidential and profitable business relationship with him. Argumentation typically faces conflicting situations attempting to resolve them through reasonable decisions inspired by interpersonal reasoning processes. Now, as a consequence of the new paradigm created by AML&CTF laws, banks are in particular invested with two unprecedented tasks entailing argumentative practices for their accomplishment: (1) the justification of the 'reasonable suspicion' when transmitting a report (2) the maintenance through argumentative strategies of the professional and interpersonal relationship with the client, aiming at reconciling, as far as possible, the respect of the juridical framework and the bank's institutional goals. The fulfillment of these tasks, necessarily requiring argumentative practices, is indispensable for the well-functioning and the efficiency of the whole AML system, as most of the reports sent by the financial sectors reveal to be unfounded and only a small fraction leads to the discovery of a crime. This reporting overload represents a relevant cost, not only for banks but for the whole society. Analogously, the quality of the interpersonal relationship with clients is indispensable for the realization of the banking core business. After a preliminary phase, in which the legal and institutional framework are reconstructed, the research aims at analyzing the argumentative practices activated by Swiss banks in order to fulfill the two tasks mentioned. The study of the denouncing process will be based on a sample of real suspicious activity reports, anonymized and made available by MROS and will be completed by interviews to banks. The study of the argumentative strategies for preserving the relationship with clients will be based on narratives told by Swiss bankers. The research is supported by an advisory Board including the director of MROS and an executive member of the Swiss Banking Association.
Direct link to Lay Summary Last update: 21.02.2013

Responsible applicant and co-applicants

Employees

Publications

Publication
Suspicion as an argumentative move Semantic analysis of a pivotal concept in banks' anti-money laundering argumentative activities
Rigotti Eddo, Palmieri Rudi (2014), Suspicion as an argumentative move Semantic analysis of a pivotal concept in banks' anti-money laundering argumentative activities, in Journal of Argumentation in context, 3(3), 285-319.

Knowledge transfer events



Self-organised

Title Date Place

Communication with the public

Communication Title Media Place Year
Media relations: radio, television Sospetto e fiducia RSI-Rete 3 Italian-speaking Switzerland 2013

Abstract

The legislation combating money laundering and terrorism financing (AML&CTF laws) has brought banks in front of a real dilemma (cf. Reinle 2007): on the one hand, by the contract of mandate set with their client, banks have the duty to be fully committed to his best interests, ensuring him the required transparency and confidentiality; on the other hand, following AML&CTF norms, banks have the duty to monitor their client and, in case of ‘reasonable suspicions’, to secretly denounce him, risking to compromise, in this way, the continuity of a transparent and confidential relationship. This conflict of duties largely falls upon the individual banker who, on behalf of her banking institution, assumes both the task of constantly monitoring her client and the task of undertaking and maintaining a confidential and profitable business relationship with him. The proposed research moves from the view that, in order to tackle this complex issue and capture what is put at stake by this conflict of duties, an interdisciplinary approach is required, involving not only law and banking economics but also argumentation theory. To our best knowledge, no author has yet systematically considered this object in the domain of argumentation studies (a first approach is outlined in Cottier & Palmieri 2008). Argumentation is a discipline that typically faces conflicting situations - differences of opinion, controversies, conflicts of interests, problem-solving- attempting to resolve them through reasonable decisions inspired by interpersonal reasoning processes. (Rigotti & Greco Morasso 2009) Now, as a consequence of the new paradigm created by AML&CTF laws, banks are in particular invested with two unprecedented tasks entailing argumentative practices for their accomplishment: (1) the justification of the ‘reasonable suspicion’ when transmitting a denouncing report to the Financial Intelligence Unit; (2) the maintenance through argumentative strategies of the professional and interpersonal relationship with the client, aiming at reconciling, as far as possible, the respect of the juridical framework and the bank’s institutional goals. Here, argumentation proves to have a strong relevance, as the fulfillment of these tasks, necessarily requiring argumentative practices, is indispensable for the well-functioning and the efficiency of the whole anti-money laundering system. In fact, most of the suspicious reports sent by the financial sectors reveal to be unfounded and only a small fraction leads to the discovery of a criminal activity. This reporting overload represents a relevant cost, not only for banks but for the whole society (Geiger and Wünsch 2007). Analogously, the quality of the interpersonal relationship with clients is indispensable for the realization of the banking core business.This investigation foresees a preliminary phase in which the legal and institutional framework are reconstructed. Then, the research core aims at analyzing and evaluating the argumentative practices activated by Swiss banks in order to fulfill the two tasks mentioned. The study of the denouncing process will be based on a sample of real suspicious activity reports, anonymized and made available by the Money Laundering Reporting Office and will be completed by interviews to banks’ compliance officers.The study of the argumentative strategies for preserving the relationship with clients will be based on narratives told by Swiss bankers.The results of the study will lead to the construction of a practice-oriented model proposing useful guidelines for (1) a more effective communication better supporting the cooperation between the instances of the AML complex and (2) an improved implementation of the law in banks’ practices at the level of decision-making processes (in order to reduce the reporting overload) and at the level of interpersonal relations with clients (in order to minimize the conflict of duties).Given the interdisciplinary character of the research, the project team is composed by the main applicant, Eddo Rigotti, and two co-applicants, Giovanni Barone-Adesi and Bertil Cottier, each specialist in one of the involved disciplines (argumentation, economics, and law respectively). The research team further includes a Post-Doc research in financial argumentation and a PhD student in banking economics.The research is supported by an advisory Board including members of the most important instances of the AML complex, in particular the director of the Money Laundering Reporting Office and an executive member of the Swiss Banking Association.
-