Abstract:

The Dynamic Capabilities Framework provides a strategic foundation for enhancing Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) effectiveness in an increasingly complex financial environment. Drawing on Teece’s model, this study emphasizes the importance of developing sensing, seizing, and transforming capacities within financial institutions and regulatory bodies to address evolving risks. A conceptual framework is proposed, integrating regulatory pressures, technological innovations, and organizational capabilities to strengthen AML/CFT practices and safeguard the integrity of the global financial system. This paper aims to explore how these capabilities can be leveraged to strengthen AML/CFT practices and protect the integrity of the global financial system.