Saudi Arabia has implemented international standards to combat money laundering and terrorist financing in line with the directives developed by the Financial Action Task Force (FATF). 

 

This was stated by Dr Ahmed bin Abdul Karim Al-Kholifey, Governor, Saudi Central Bank, and Chairman of the Anti-Money Laundering Permanent Committee, in his keynote speech at the opening ceremony the 12th edition of the Compliance and Anti Money Laundry Seminar in Saudi Arabia.

 

He explained that the kingdom strengthened its legislative and regulatory framework to combat financial crimes. “The Anti-Money Laundering Permanent Committee, in partnership with all respective committees in the kingdom, worked on enhancing the performance of compliance authorities. Furthermore, the recent G20 summit Communique confirms the G20 leaders’ affirmation to support FATF’s commitment,” he said at the seminar organised by Refinitiv and The Saudi Central Bank.

 

“Among the most prominent of the risks observed during the pandemic period are the increase in financial fraud cases, namely, emergence of individuals claiming to invest in digital currencies or claiming to provide investment services in some major companies,” he pointed out.

 

In response to the threats, Al-Kholifey noted that the kingdom, represented by the regulatory authorities, including the Central Bank of Saudi Arabia, has taken many procedures to manage these risks and developed appropriate policies. 

 

Al-Kholifey added: “With the increasing global interest in modern technologies, the Central Bank of Saudi Arabia has been keen to promote and support prudent financial innovations that achieve great benefits for the financial and economic system.”

 

David Craig, CEO, Refinitiv, spoke about Saudi Arabia’s leadership in fighting financial crime and the Kingdom’s critical role in today’s global financial system. “In the shadow of Covid-19, we now find ourselves in a very different Risk landscape. As a result of the pandemic society our lives have become far more digital and reliant on remote transactions, where before we met face to face. Many of you here today will have had to radically alter client relationships, in many cases almost overnight, and this remoteness is giving criminals a helping hand,” he added.

 

Craig noted that financial criminals are following the money and becoming more sophisticated in their tactics. “In the Middle East – as elsewhere – we are witnessing a major increase in identity-related fraud as organisations digitally-onboard customers. Not surprising, this has become a significant focus of Refinitiv’s recent work and investments. We’re seeing financial criminals move into human trafficking, wildlife smuggling and other green crimes like the logging of pristine forest – all of which with devastating impacts on people, society and the biodiversity of our planet. Financial crime is never a victimless crime,” he said.

 

“If we needed any further proof that financial crime is evolving, look at the world of crypto currency and virtual assets. As bitcoin tests new highs on the markets, hidden from sight are virtual assets being used as a highly-effective tool to launder money. It is a salutary reminder to countries considering virtual assets – including several in the Middle East – of the vigilance required and of the need to stay ahead of the criminals and not running to catch them up,” Craig explained.

 

He pointed out that advances in technology, coupled with increased volumes and enhanced data, offer a tantalising glimpse of what is possible. “Artificial intelligence, machine learning and network analytics, fuelled by high quality data, are powerful new weapons we are helping clients deploy,” he said.

 

Ali Al Qahtani, Deputy Chief Compliance Officer and the Head of Financial Crime Compliance, ‎Saudi British Bank, explained that Cybercrime has significantly increased across the global. “The collective campaign led by the Saudi Central bank helped local banks address these emerging challenges. In line with the local regulations, we kicked off a high-level engagement and set up a crisis management committee. We also had effective planning in place to address staff safety and rolled out precautionary measures outlined by the Ministry of Health. Awareness is a key component in promoting a sound compliance culture and that is why I believe that ongoing communication is a necessity.”

 

Jesse Spiro, Global Head of Policy & Regulatory Affairs, Chainalysis, pointed out that digital payments are rapidly evolving now. “Digital interaction is exposing the financial system to new risks. We have seen an increase of fraudulent activities in jurisdictions where there is a weaker regulation. It is imperative that there is accurate KYC policies are carried out in the cryptocurrencies industry,” he noted. 

 

Sprio added that KYC and chain analysis lead for greater financial integrity. “We are seeing more public private partnerships that are developing knowledge in new areas. This is a good advancement in a growing virtual environment system,” he explained.

 

Cormac Sheedy, Head of Mena region, Fenergo, highlighted how smaller banks are actively implementing configuration and risk models. “Banks in the region are aware that digital transformation is a priority. Smaller banks need to embark on this digital transformation journey. They also need to ensure they hire the right talent and pay attention to cyber security challenges.”

 

Uzair Bawany, Co-Founder & Chief Revenue Officer, Traydstream, spoke about the importance of deploying the APIs and connectivity tools to strengthen the banks’s workflows. “Agility in connectivity and automating processes will be key factors in any transformation journey.  Data specialist have to come in early and legacy should be addressed too. There is an increased appetite for banks to flag KYC issues and the ability to protect their own data is now very real. Some banks have already progressed on this journey while others are still struggling with some of legacy issues,” he noted.

 

Amjad Alhumaidi, Regulatory Sandbox AML/CFT, Subject Matter Expert, Saudi Central Bank (SAMA), explained that AML safety brings many opportunities and challenges. “We see different innovations in compliance especially as digital becomes the new norm. Although the pandemic accelerated digital transformation, it also showcased the strength of the AML & CFT regulations in Saudi Arabia.”

 

“Data transformed the financial industry in terms of customer behavior, process, among other aspects. Data will help us better integrate technologies regardless where financial institutions are in terms of their digital transformation journey. Moving forward, Financial institutions will be more open to adopting a digitised KYC process. We will continue to scale AML and introduce changes in processes to protect the integrity of the Saudi financial system.”  -- Tradearabia News Service