New survey shows investment in fighting fraud has surged by between 25-50% compared to two years ago
Companies in the Middle East and North Africa are facing rising costs to fight financial crime, with more than half reporting a climb of higher than 25 percent in the past two years, according to a survey.
In a region where the risk of money laundering and terrorism looms larger than in some other parts of the world, many businesses are under pressure to tighten anti-financial crime and compliance rules.
The survey by Thomson Reuters and Deloitte of more than 160 people working across the corporate and financial sector showed that 33.54 percent believed investment in combating financial crime and compliance had risen by more than 25 percent compared to two years ago.
A further 27.85 percent of those surveyed said compliance costs had surged by more than 50 percent over the same period.
And these costs will only keep increasing, with 49.69 percent of respondents expecting such investment to rise by more than 25 percent over the next two years, with a further 24.84 percent forecasting a rise of more than 50 percent.
The growing costs reflected a rise in compliance activity in the past two years. A total of 25.61 percent of those surveyed said their companies were spending more personnel hours in meeting compliance objectives, with a further 25 percent saying they had increased staffing within compliance activities.
In the next two years, 54.8 percent of companies said they expected growth in either the number of personnel hours handling compliance or staffing levels combating financial crime.
Several businesses in the United Arab Emirates have been fined by US and local regulators in recent years for breaching sanctions against Iran. Meanwhile, UAE banks have been banned by the government from doing business with organisations including the Muslim Brotherhood, ISIL and the Houthi movement, which is fighting for control of Yemen.
The survey showed that anti-money laundering was the top priority for most companies in combating financial crime, with 82.50 percent of firms saying they had such policies in place.
This was followed by policies to protect against fraud (73.13 percent), comply with sanctions (66.88 percent), for counter-terrorism financing (63.13 percent) and to stop bribery and corruption (56.25 percent).
But only 33.13 percent of firms said they had cyber crime policies in place.
Saudi Arabia's national oil company Aramco was hit by a cyber attack in August 2012 that targeted 30,000 computers in a bid to stop oil and gas production in the kingdom. In the months after this, both RAKBANK and Bank Muscat disclosed cyber-criminals had stolen debit card data from customers.