Financial criminals in the Middle East are increasingly exploiting advanced technologies and the region’s economic disparities to orchestrate sophisticated scams, HSBC’s regional head of financial crime has warned.
The region’s unique combination of high-net-worth individuals, transient populations, and proximity to sanctioned nations makes it particularly vulnerable to various forms of financial crime, from sophisticated AI-driven fraud to traditional money laundering schemes.
“When you look at this region from a financial crime perspective, we unfortunately witness all types of financial crime – fraud, money laundering, sanctions evasion, bribery and corruption,” Colin Lobo, HSBC’s Regional Head of Financial Crime for the Middle East, North Africa and Turkey, told Arabian Business on the AB Majlis podcast.
Recent global surveys indicate fraud costs vary significantly across the region’s economic spectrum. “The more developed the country is, the cost of fraud per victim was also commensurate with that. You compare the UAE – it was something like $2,500 per incident versus Egypt at $350,” Lobo said.
The evolution of financial crime has accelerated dramatically over the past two decades, transforming from simple check fraud in the 1990s to today’s sophisticated cyber threats. “We’ve moved into the 2020s where financial crime has moved more into digital platforms… involvement in cryptocurrency-related scams, deepfakes being used to bypass security, and sophisticated AI-driven fraud,” Lobo explained.
Of particular concern is the rise in social engineering attacks, where criminals impersonate legitimate authorities. “We’ve seen where law enforcement SMSs have been spoofed. Somebody thinks it’s a message from Dubai Police about a fine,” Lobo said, adding that fraudsters have become “more bold,” even conducting video calls while posing as law enforcement officers.
HSBC launches fraud public awareness app
In response to these growing threats, HSBC has launched a dedicated fraud awareness application, available to both customers and non-customers alike. The app serves as a comprehensive repository of information about current scams and includes interactive features such as quizzes to help users identify potential threats.
Looking ahead, Lobo emphasised that the advent of quantum computing will present new challenges for security measures. “The challenge in the next few years is going to be as quantum computing develops and becomes more mainstream, we’d all have to think about our security and the technology we use to protect and keep our customers safe online.”
The UAE’s recent removal from the Financial Action Task Force (FATF) grey list has catalysed enhanced cooperation between financial institutions and law enforcement. “In the UAE, the public-private partnership is progressing very well. We work alongside law enforcement and the UAE Financial Intelligence Unit to share stories, share cases… and hopefully seize stolen funds and give restitution to the victims,” Lobo said.
The partnership approach represents a significant shift in combating financial crime, bringing together law enforcement, judiciary, private sector banks, money service bureaus, and lawyers to exchange information about emerging criminal methodologies.
HSBC’s fraud awareness app is available for download on app stores, marking a significant step in the bank’s community-focused approach to fraud prevention education. The initiative comes as part of broader efforts to combat the rising tide of financial crime in a region that continues to attract both legitimate investment and criminal activity.
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