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Digital Compliance in Action: A Comparative Study of AML Strategies in Malaysia and Indonesia’s Financial Sectors

Year: 2025

Type: article

Abstract: This paper presents a comparative analysis of digital anti-money laundering (AML) compliance strategies in Malaysia and Indonesia, two major financial hubs in Southeast Asia.Using institutional theory and innovation diffusion as analytical lenses, the study explores differences in regulatory frameworks, institutional readiness, and adoption of digital tools such as e-KYC, AI-based monitoring, and RegTech.Through qualitative content analysis of national policies, FATF evaluations, and official reports, the research reveals that Malaysia exhibits greater digital maturity, policy coordination, and regulatory innovation, supported by initiatives like the Fintech Regulatory Sandbox and e-KYC guidelines.In contrast, Indonesia's AML transformation remains constrained by institutional fragmentation, limited digital infrastructure, and uneven implementation.Despite these differences, both countries face shared challenges, including data siloes, talent shortages, and emerging risks from fintech platforms.The findings offer key insights into how ASEAN economies can strengthen AML efforts through digital innovation, cross-border cooperation, and harmonized regulatory approaches.

Source: International Journal of Academic Research in Business and Social Sciences

DOI: 10.6007/ijarbss/v15-i9/26586

Authors: Zuraidah Binti Mohd Sanusi, Syahrul Ahmar Bin Ahmad, Sharifah Nazatul Faiza Binti Syed Mustapha Nazri, Mohammad Aktaruzzaman Khan

Institution: International Islamic University Chittagong

Language: English

Topic: Crime, Illicit Activities, and Governance

Subfield: Sociology and Political Science

Field: Social Sciences

Domain: Social Sciences

SDGs: Peace, justice, and strong institutions, Partnerships for the goals, Industry, innovation and infrastructure

Open Access status: diamond

Funder: Universiti Teknologi MARA