FEATURES OF PRIMARY FINANCIAL MONITORING IN THE COUNTRYʼS ECONOMIC SPACE

Abstract

The study investigates topical issues related to the functioning of Ukraine’s national financial monitoring system. Special attention was paid to the role of primary monitoring entities in the economic space of the state. The purpose of this study is to systematize the special features of the formation of financial monitoring in Ukraine and outline the prospects for the development of this system using primary financial monitoring in light of modern challenges and threats. The methods of analysis and synthesis were used to achieve this goal. Specifically, the inductive approach was applied to examine statistical data on financial transactions subject to financial monitoring, and the deductive approach was used to formulate logical conclusions on building an effective financial monitoring system. This allowed us to formulate hypotheses and test them in practice. Comparative analysis was employed to evaluate the role of individual primary financial monitoring entities based on collected statistical data or empirical research in order to identify features, advantages and disadvantages. In order to make the data collected more comprehensible and available for further research, generalization was applied to organize the data and draw conclusions about the future directions of primary financial monitoring in Ukraine. The study found that income shadowing results in serious economic and social issues in addition to serious financial ones. Primary financial monitoring is mostly carried out by banking institutions. At the same time, in 2024, PFMEs like jewelers, realtors, notaries, lawyers, and pawnshops greatly increased the amount of work they did in the area of financial monitoring, and their share in the structure of reports from non-bank institutions rose. It was established that the policy of cost optimization leads to a reduction in the number of structural units of institutions that carry out primary financial monitoring. Therefore, in order to increase the efficiency of the PFME, further development of the primary financial monitoring system should be carried out in four directions: improving the quality of identification and verification, enhancing the risk-based approach, strengthening control and responsibility, and automating reporting processes.