As UAE is becoming one of the leading business and financial hub, it needs to keep up with the standards required for the effective implementation of regulatory, operational and legal measures necessary to combat the risks and threats that endanger its integrity. There is thus a need for enterprises in the UAE to have a robust and forward looking approach to transaction monitoring system.
UAE has made prominent improvements to its AML/CFT system in the past few years, such as the development of National Risk Assessment (NRA), strengthening co-ordination across the Emirates, improving upon technical details in its regulations and legislations and increasingsupervision in previously non-covered sections. These measures have shown positive results in the compliance management of UAE.
Measures to Reflect and Improve Upon
While there have been a lot of rapid advancements, the UAE administration still need to focus on better of legalities and arrangements, refinement of ML/FT risk assessment tools, the enhancement of ML prosecutions and improvement of international cooperation efforts. There is an immediate need to enhance the overall effectiveness of the framework and control financial crime.
Need for Transaction Monitoring System in the UAE
Conventionally, financial institutions in the UAE have had a good track record of applying preventive measures, and banks have extensive knowledge and experience in dealing with ML/FT risks and controls. Other institutions should take note to follow similar enhanced due diligence measures to reduce risks for themselves and their customers. There are also new and unprecedented risks and challenges that have arisen due to the pandemic that might need special attention.
Practices to Ensure Financial Safety
The benefits of collating, contextualizing and standardizing that fulfill Know Your Customer (KYC) and Customer Due Diligence (CDD) requirements must be realized. The inconsistencies and incompletion of this information is a big blind spot in the financial system that can be abused. The centralization of corporate information would enable the organization to overcome almost all major challenges of the KYC process.A KYC software that reduces knowledge gaps between the individual and the corporate team will improve the efficiency and effectiveness of the entire process.
Fixing the gaps between the AML/CFT and Sanctions teams will also regulate a lot of compliance efforts. Data needs to be shared seamlessly amongst the key divisions of the organization to ensure an effective response to financial risk detection and prevention.