Financial Crime World

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Banking Industry Fraud Trends in Jordan: A New Era of Banking?

Stability Amidst Global Challenges

Despite global challenges, the banking sector in Jordan has shown stability with increased net profits, total assets, and customer deposits, according to KPMG’s latest Banking Perspectives: Jordan 2023 report.

Financial Performance Highlights

  • Net profits have increased by approximately 42% compared to FY2021
  • Total assets have grown by 5.9% since December 31, 2021
  • Customer deposits have increased by 7%

Rabih Shalabi, head of Audit at KPMG in Jordan, commented: “The beginning of 2023 presented widespread challenges for the global banking industry, notably in Europe and the US, requiring some introspection and risk aversion to avoid any spill-over effect.”

Fintech and ESG

Economic Expansion and Lending Growth

  • The banking industry has continued to benefit from economic expansion, with an increase in lending
  • Industry-wide loan-to-deposit ratio reached around 73% at the end of December 2022

Fintech innovation is expected to focus on solving or supporting major global transitions such as:

  • Demographic impact on productivity
  • Low carbon economy
  • Emerging markets integration
  • Automation

Jordan has committed itself to integrating sustainability into the banking and finance sector, showing a commitment to the future. The ESG agenda in the Middle East is gaining momentum due to government initiatives and growing need for disclosure on sustainability reporting and implementations.

According to Ovais Shahab, Head of Financial Services at KPMG in Saudi Arabia and Levant: “The next wave of fintech innovation is expected to focus on solving or supporting major global transitions such as… "

Non-Performing Loans (NPLs)

Stability and Coverage Ratio

  • NPLs have remained relatively stable in 2022 compared to 2021
  • Coverage ratio for NPLs has increased, reflecting robust granting, provisioning, and collection strategies implemented by banks

The report highlights the need for fintech integration into traditional financial systems, requiring significant investments in technology and regulatory support. Some banks in Jordan have already invested in this area by establishing fintech entities, while others have innovated in mobile applications to enhance convenience, personalization, and data-driven services.

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