RIYADH, SAUDI ARABIA: The Kingdom of Saudi Arabia has tightened regulatory and monitoring procedures to handle crimes related to the money laundering.
“Recent years have witnessed a rapid growth in money laundering crimes and diversity of their methods. We also are all aware of the economic, social and security consequences of money laundering crimes, as it does not only affect the country in which it is perpetuated, but also affects economies and the security of many other jurisdictions,” H.E. Dr. Ahmed Abdulkarim Alkholifey, Governor of the Saudi Arabian Monetary Authority (SAMA) and Chairman of the Anti-Money Laundering Permanent Committee (AMLPC) told the audience of the AML Forum.
Thomson Reuters, the world’s leading source of news and information for professional markets, inaugurated today the 9th Annual Compliance and Anti-Money Laundering (AML) Seminar in Riyadh, Kingdom of Saudi Arabia.
The seminar is held in association with the Institute of Finance of the Kingdom of Saudi Arabia and under the patronage of During the opening ceremony, H.E. Alkholifey launched a new website for the AMLPC. The platform will be used to enhance collaboration between various AML parties and entities.
H.E. Alkholifey explained that AML is one of the big challenges facing the international community.
“To combat this epidemic, countries tend to apply international standards. Nevertheless, places with poor record in security and control and high rates of crime and corruption can constitute safe havens for perpetrators of this crime,” he noted.
H.E. Alkholifey pointed out that the AMLPC represents and promotes the role of Saudi Arabia in regional and international forums concerned with AML through participating in the events and working papers, whether through its permanent membership in the MENAFATF, or its membership in FATF as an observer, which are important channels through which Saudi Arabia shares its experiences with other countries. Due to the serious effects of money laundering crime on the economy, SAMA practices its regulatory and supervisory role by issuing from time to time instructions and amends certain regulations in compliance with international standards and requirements.”
“There is a need to adhere to AML rules by entities and adopt a risk based approach that aims to better understand and mitigate threats and vulnerabilities. The risk based approach would make greater use of human and financial resources to effectively detect, prevent and control operations and reporting suspicious activities, and subsequently, safeguard financial institutions against exploitations for illegal operations.”
“Saudi Arabia was granted observer status in the FATF in June 2015 due to its high AML/CFT commitment and actions carried out by the Saudi authorities. The AMLPC, which comprises of number of concerned authorities, has prepared an action plan with important steps to improve the legislative environment and enhance the effectiveness of AML measures. The AMLPC is now reformulating certain provisions of the AML Law and they are expected to be issued soon. Competent authorities in Saudi Arabia, including SAMA, have introduced a number of measures, at both regulatory and procedurally levels, to be in compliance with the international community’s requirements, intentional treaties, Security Council resolutions and the 2012 FATF Forty Recommendations.”
H.E. Alkholifey explained that the AMLPC also seeks to finalize the national risk assessment, by which risk sources and degrees will be identified to direct resources towards the most vulnerable areas and ensure the development of measures that commensurate with the degree of risk. These efforts and actions are part of Saudi Arabia’s readiness for mutual evaluation, which has started early this year and is expected to continue until mid-2018.
“The compliance role has significantly evolved over the past few years. Today’s compliance professionals require a repertoire of competencies such as agility, the ability to learn quickly and perform under pressure, critical thinking, and they should have a good head for details. According to the Thomson Reuters MENA financial crime report, 65% of compliance officers indicated that their compliance investment had increased over the past 2 years, while 63% indicated that they expected investment to continue to increase over next 2 years,” Nadim Najjar, Managing Director, Middle East & North Africa, Thomson Reuters, said.
“More than 86% respondents are concerned about cybercrime and 46% lack confidence in their financial crime programs. Around 75% of respondents are confident that their technological solutions are operating as required, while 45% desire better analytical and data management functionality from their technology,” Najjar said.
“Looking forward, we believe that compliance will become part of the fabric of business rather than a ‘bolt on’ function. It will help accelerate time-to-market for new products and help reduce operating costs. We also expect pre-built compliance frameworks, or end-to-end systems to be embedded into workflows and automatically maintain compliance and provide an early warning system.”
“The Institute has been playing a very active role to spread awareness about the regulatory mechanism that governs the financial and banking practice in Saudi Arabia. We created a medium to exchange ideas and engage between supervisory bodies and the financial sector,” Haitham Alghulaiga, Acting Director General of the Institute of Finance (IOF), said.
“We continue to focus on strengthening the Saudi financial sector through enhancing the skillset of our human resources and rolling out specialized training programs. We also offer several training courses in the area of compliance and AML which have attracted a significant number of industry stakeholders,” he said.
“Authorities are faced with the challenge of constantly combating ML crimes especially in a rapidly changing regulatory landscape. It is imperative that we continue to raise awareness on the impacts of regulation on the economy in general and the financial sector in particular.”
Bettina Roth, Director, Supervision, Financial Services Regulatory Authority, Abu Dhabi Global Market (ADGM), spoke about the benefits of Fintech and the importance of setting up the appropriate infrastructure and educational systems for a vibrant Fintech industry.
Bryan Stirewalt, Managing Director, Supervision, Dubai Financial Services Authority (DFSA), explained that financial literacy is a key prerequisite for regulators to do in order to pave the way for a better Fintech industry.
“Fintech starts ups are being established in UAE, Jordan, Egypt, and Lebanon. I believe Saudi Arabia can play a more active role on this front. It can be a hub for starts up and attract Fintech firms especially as we see more Arab millennial using digital services,” Dr. Nasser Saidi, Founder & President, Nasser Saidi & Associates, said.
“SAMA is a very active regulator. They are watching and looking at the market, new payment technologies and gauging what Fintech companies really require. Banks should focus on revisiting their long-term strategies to meet the requirements of the rapid digital change. A regulator can find a way to help banks finance SME with minimizing potential risks,” Abdulaziz Al-Helaissi, Chief Executive Officer and Board Member, Gulf International Bank, said.
Soren Nikolajsen, Managing Director, Alawwal Bank, noted that regulators could use new technologies in a more effective way. He noted that around 97 per cent of bank transitions are today done through ATMs, mobile and online. “The Saudi banking industry is well capitalized and well-funded. Although we have seen slow growth rates last year, it is notable that Saudi banks continued to generate good profits.”
