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Survey highlights steps to fight financial crime

Bahrain Business
Tue, 06 Feb 2018
By Avinash Saxena


MANAMA: Securing the right resources to support increasingly sophisticated compliance programmes is a key priority this year for businesses in Mena, according to the fourth Thomson Reuters Mena Financial Crime and Compliance report brought out in partnership with Deloitte Middle East.

Nearly half (48 per cent) of respondents to this year’s survey highlighted securing new resources and the necessary skills required for more mature environments as the main challenge they will face in managing their financial crime and compliance policy in 2018.

These themes were discussed at the launch of the report yesterday during the 12th Annual Mena Regulatory Summit held at The Ritz-Carlton Bahrain under the Patronage of the Central Bank of Bahrain (CBB).

Organised by Thomson Reuters with support from the CBB, the event brought together global and regional leaders from leading financial institutions and regulators including central banks, the US Treasury, Wolfsberg Group, IMF and Mena Financial Action Task Force.

Thomson Reuters Middle East and North Africa managing director Nadim Najjar said: “The report reveals that almost a quarter of respondents had little or no confidence that their financial crime prevention programmes were compliant with regulatory requirements.

“A lack of senior management support was cited as one of the main reasons, with 47pc of respondents citing it as a factor. There may be an element of regulatory fatigue. When we first began tracking the volume of regulatory updates in 2008, they numbered 10 a day. Today the figure is closer to 200 a day – a 20-fold increase – and showing no signs of slowing down.”

Deloitte Middle East Financial Services Regulatory Advisory director Nipun Srivastava said: “As we see regulatory fatigue set in across the industry, compliance is realising its role as a partner to the business instead of being a controller.

The risk and compliance functions should develop comprehensive compliance strategies around their market, business needs and customer profile to improve the return on investment.

Looking ahead, automation, AI and Big Data analytics provide an enormous opportunity to both the regulators and Financial Intelligence Units to reduce their cost of compliance and improve effectiveness of controls.”

“As the survey shows, there is a clear need to provide a cohesive approach to the ongoing fight against financial crime, both in Mena and globally,” said Thomson Reuters Mena Risk Market Development lead David Shepherd.

According to the report, there is a lack of co-ordination of a regulatory response between regulators.

“We see a growing effort by regulators to provide controls for this issue, for example, regulators in Hong Kong, Singapore, the UK and the US have launched supervisory initiatives to manage their banks’ cyber risks, but given the globalised nature of the Internet, increased collaboration between regulators would help reduce cyber risk,” added Mr Shepherd.

avinash@gdn.com.bh