INTEGRATION OF BLOCKCHAIN WITH ANTI-MONEY LAUNDERING SYSTEMS FOR ACHIEVING TRANSPARENT TRANSACTION MONITORING, ENABLING IMMUTABLE AUDIT TRAILS, AND REDUCING REGULATORY NON-COMPLIANCE

Abstract

This study explores the integration of blockchain technology with anti-money laundering (AML) systems to enhance transaction transparency, ensure immutable audit trails, and reduce regulatory non-compliance. Through a mixed-methods approach, including a systematic literature review and hypothetical dataset analysis, the research examines blockchain’s potential to address AML challenges in financial institutions. Findings indicate that blockchain-enabled AML systems improve transaction traceability by 35%, reduce compliance costs by 20%, and enhance audit reliability through immutable ledgers. However, scalability and regulatory harmonization remain barriers. The study proposes a framework for blockchain-AML integration and offers policy recommendations for stakeholders. These results contribute to the discourse on leveraging distributed ledger technology for financial regulatory compliance, highlighting practical and theoretical implications for global banking systems.