Financial Crime World

Larger-than-Necessary Volumes of Data Pose Risk to Financial Institutions

Financial institutions operating in the United Arab Emirates (UAE) are facing a significant challenge due to large volumes of data, which can pose a risk to their operations. With multiple jurisdictions and agencies demanding access to this information, the risk of unrelated violations coming to light during an investigation is growing.

The Complexity of Regulatory Requirements

The UAE’s position as a hub for international finance and trade means that domestic banks operate across the Middle East region and numerous jurisdictions, subjecting them to a range of regulatory frameworks and agencies. This patchwork of global rules and investigative requirements can lead to conflicting guidelines and timelines, increasing the risk, cost, and complexity of investigation and disclosure processes.

The Importance of Data Management

Regulatory inquiries often have compressed timelines, with agencies seeking access to large volumes of complex data within tight deadlines. In this environment, it is essential for organizations to be prepared to collect, review, understand, and produce this data efficiently and effectively.

Challenges Posed by Mergers between Financial Institutions

The recent trend of mergers between financial institutions in the UAE has also introduced new complexities. These mergers result in the convergence of historical data, technology, and disparate operational processes, making it critical for institutions to rationalize their technology solutions and bring operations and data into harmony.

Expecting the Unexpected

FTI Consulting’s experience with clients navigating these challenges highlights the importance of understanding enforcement trends and data challenges that can impact an organization’s risk profile. Without visibility into where critical data exists across the organization, exposure cannot be fully understood.

  • In one recent engagement, FTI Consulting helped a large global bank navigate multiple, cross-continental regulatory inquiries under tight timelines.
  • The team established workflows to enable visualisation and review of all structured and unstructured data simultaneously in one platform, ultimately completing a thorough and defensible investigation ahead of the client’s deadline to present findings to regulatory agencies.

Conclusion

As the number of relevant data sources grows, overall data volumes continue to increase, and the time to collect this data shrinks, risk surrounding financial crime and regulatory enforcement will continue to intensify. Financial institutions in the UAE must take these risks seriously and work to establish readiness for common investigations challenges. Working with data and investigations experts who know what to expect and how to navigate complex data issues under pressure will help reduce risk and improve overall regulatory response over the long term.

  • Multi-jurisdiction requirements
  • Compressed timelines
  • Complexities resulting from mergers between financial institutions
  • Data privacy risks
  • Financial crime and regulatory enforcement
  • Investigations challenges in international finance and trade