Nearly three quarters of organisations have fallen victim to financial crime in the last year, leading to losses of $1.45 trillion, according to a new report from financial market data and infrastructure firm Refinitiv.
According to the data, 73 percent of organisations across the Middle East are aware of the incidence of such crimes, spiking to 85 percent in Saudi Arabia.
The report noted that gaps in compliance exist, with 51 percent of global organisations’ external relationships lack an initial due diligence check at the onboarding stage.
An average of 4 percent of global turnover is spent on customer and third party due diligence checks, rising to 5 percent in the UAE.
The report notes that 100 percent of respondents in Saudi Arabia and 99 percent in the UAE believe that technology can significantly help with financial crime prevention.
Approximately 61 percent of respondents in the UAE and 88 percent in Saudi Arabia have difficulties harnessing technological advancements, while 52 percent in Saudi Arabia reported prioritising automation and digitisation for investment.
About 85 percent of MENA respondents – and 92 percent in Saudi Arabia – believe that humans are a necessary asset to source reliable data and train algorithms. Over 95 percent of respondents in Saudi Arabia were found to believe that the benefits outweigh the risks when sharing information and collaborating against financial crime.
A majority – 78 percent – are struggling to harness technological advancements, stalling progress.
“It is clear from the results of this report that businesses exposed to financial crime threats need to maximise their use of technology and future collaboration could prove key to realising the potential of innovation, particularly between tech companies, governments and financial institutions,” said Phil Cotter, managing director of the Risk business at Refinitiv.
Cotter added that “significant advancements in technology facilitated by innovations such as AI, ML and cloud computing are already under way.”
“These technologies are enabling intelligence to be gathered from vast and often disparate data sets, which together with rapid advances in data science are transforming the approach to compliance, streamlining processes such as Know Your Customer (KYC) and helping to uncover previously hidden patterns and networks of potential financial crime activity,” he added.For all the latest banking and finance news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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