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The financial crime trends in MENA

The financial crime trends facing MENA-based organizations in 2020 have been revealed in a new Refinitiv survey. How is the region responding to regulatory changes, the evolution of compliance technology, and the need for good quality data?


  1. A Refinitiv survey tracks the financial crime trends in MENA, including the standards and attitudes around compliance and the approach to new technology.
  2. Despite the increasing levels of investment into compliance, 36 percent of survey respondents still lack confidence in their financial crime solutions.
  3. Using compliance technology that incorporates data of a high level of quality can dramatically reduce the rate of false positives, an issue that has been a thorn in the side of compliance executives around the world for several years.

Despite investment into compliance climbing steadily over the years, the level of confidence in compliance solutions remains stubbornly low for MENA’s compliance executives with 36 percent reporting that they lack confidence in their financial crime solutions.. If higher levels of investment do not increase confidence levels, what will?

There is no doubt that sophisticated technology is a critical element of a successful compliance policy, but what should not be overlooked is the importance of good quality, reliable data as well as human intervention and intuition. The interaction between these elements will help to ease the anxiety in compliance departments and reduce some of the burden of remediation.

This is even more true during this time of COVID-19. Even before the pandemic, we noted that evolving global regulation had forced criminals to innovate. Now, with lockdowns in place around the world, many businesses are moving all or more of their operations online. Criminals will be seeking to benefit from increased online traffic. With identity-related fraud one of the more sophisticated and rapidly growing areas, now is not the time to relax screening and due diligence protocols. If anything, now is the time to increase those controls.

More than ever, the right data, tools and insights are needed for better decision making, to protect organizations against crime.

It is a time when hypervigilance is required.

Every year, Refinitiv surveys predominately compliance professionals across the MENA region about their experience of financial crime and compliance. This is the sixth report in the series, most respondents are based in large companies with more than 250 employees and over half belong to organizations with a presence in more than one country.

Read the Report: Financial Crime in the Middle East and North Africa 2020

Digital identification

Many organizations are embracing new technologies in an effort to cope with their increasing compliance burden. A recent innovation, digital identity, looks promising and it’s notable that a sizeable group, 29 percent, has already invested in the concept.

Digital ID has the ability to remove much of the pain of the compliance task.  The client supplies the information which reduces the potential for error, and once verification of details is achieved client information can be easily shared between departments and, with permission, between organizations. There is a natural barrier to digital ID however – the lack of digitized documents that are necessary for identity verification. Identification relies on a set of documents held in disparate locations which may not always be easily accessible. For this reason, it may take some time for digital ID to become widely available in the region, as pulling together the various documents required for official verification will be a laborious, time consuming process.

A solution needs to be found however, over 51 percent of respondents say that their organization has fallen victim to financial crime, up from 44 percent in the previous year’s survey.

This suggests that spending more on compliance may not always be the answer to the compliance challenge. Financial criminals are professionals, hiding illegal financial flow is their job and to be ahead of the game requires smart, not indiscriminate, investment. The fight back against financial crime requires decision making based on intelligence and data, and this will be an increasing need as the regulatory environment increases in complexity.

Know your risk

We see for example that 28 percent of respondents do not assess their risk on a regular or frequent basis. Assessing risk within an organization is time consuming, a baseline risk assessment would have been conducted during the onboarding process of the client relationship so there is some understanding of risk, and it may seem a waste of scarce resources to screen for risk again. Without regular and systematic screening for risk, however, decisions will be taken about compliance spend and focus that may be entirely unsuitable according to the organizational risk profile.

Unforgiving regulatory environment

Compliance is not getting any easier and it will become even more complex now. A series of Financial Action Task Force peer reviews has resulted in increased regulatory scrutiny in various states across the region and at the same time global regulatory activity, such as the European Union’s Fifth Money Laundering Directive, has had a recent impact on compliance processes. The number of compliance programs increases every year. The most commonly employed compliance program is anti-money laundering (AML), which has been the case over the life of this study, unsurprising given the prominence of AML regulation in recent years. Anti-bribery and corruption (ABC) programs are always the poorer sister to AML programs, this year 59 percent of respondents claimed to have one in place, despite a strengthening of ABC regulations globally recently.

Coping with an incredibly dynamic and ever evolving sanctions situation can be challenging for organizations. Yet, nearly a third of respondents do not have a sanctions program in place, although this is a smaller group than last year’s survey report when over half of respondents did not have a sanctions program.

Effective sanctions compliance

International sanctions are fluid at the moment and require careful monitoring, so investing in an effective sanctions program is worthwhile. Fragmentation in the global response has created an uncertain situation, one that is increasingly difficult to predict.

Understanding ultimate beneficial ownership (UBO) will become increasingly important and it is a program that is likely to expand. At the moment, uptake is 53 percent, but this number should grow as regulatory pressure continues to bear down.

MENA financial crime trends: It’s about the data

Programs will evolve and expand as a response to regulatory pressure, and this will be further complicated in the short term due to the current pandemic. The need to be able to understand data, to discern patterns and understand trends, such as financial crime trends, will become increasingly central to company operations, and to critical decision making.

It is understandable therefore that the majority of respondents, 60 percent, when asked why they would invest in a technology upgrade, said ‘better data management and analytical capabilities’.

It is also understandable to see that 87 percent of respondents expect their technology to develop over the next two years. People are looking for greater processing power from their compliance technology, and they are willing to pay for it.

Technology alone will not ease the complexity of the compliance challenge, there needs to be a more balanced approach that considers the importance of data and human intervention. However, when asked what the focus of their compliance investment, only 12 percent of respondents replied ‘data quality’ and only 17 percent replied ‘training’.

Would a more balanced approach increase confidence levels? We think it will become critical to compliance success and ultimately, organizational survival.

Read the Report: Financial Crime in the Middle East and North Africa 2020

Visual banner created to promote the Financial Crime in the Middle East and North Africa 2020 Report from Refinitiv


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