Financial Crime World

Financial Institutions in Egypt Ramp Up Fight Against Money Laundering with Technology and Best Practices

Money laundering, the process of converting ill-gotten gains into seemingly legitimate funds, is a persistent issue in Egypt. With a strategic location, burgeoning economy, and a vast informal sector, Egypt is considered vulnerable to various forms of financial crimes. In this article, we explore the efforts of financial institutions and regulatory bodies in Egypt to combat money laundering through technology and best practices.

Egypt’s Challenges in Combating Money Laundering

  • The Financial Action Task Force (FATF) has identified Egypt as a country with challenges in combating money laundering.
  • Illicit funds derived from corruption, drug trafficking, and organized crime fuel money laundering activities in the country.
  • Up to two-thirds of the population is unbanked, and the informal economy accounts for approximately 40 percent of the Gross Domestic Product (GDP).

Promoting Financial Inclusion and Combating Money Laundering

To promote financial inclusion and integrate citizens and businesses into the formal system, the National Council for Payments (NCP) was formed in 2017. Its objectives include:

  • Limiting cash usage
  • Encouraging the adoption of electronic payment methods
  • Establishing a more robust financial infrastructure

Egyptian authorities also established the Financial Intelligence Unit (FIU) to monitor financial transactions and deal with suspicious activities.

  • Law No. 80 of 2002 on Combating Money Laundering criminalizes money laundering.
  • Decree No. 8 of 2019 on the rules and procedures for combating money laundering and terrorist financing for non-profit organizations

Role of Financial Institutions in Detecting and Preventing Money Laundering

Financial institutions play a crucial role in detecting and preventing money laundering in Egypt. They must follow the regulations set out by the Central Bank of Egypt and other regulatory bodies. To comply with anti-money laundering (AML) regulations, financial institutions adopt measures such as:

  • Customer due diligence
  • Transaction monitoring
  • Risk-based approaches

These safeguards include:

  • Screening customers against various watchlists
  • Developing risk profiles
  • Monitoring transactions
  • Reporting suspicious activity to the FIU

Technology and Best Practices in Combating Money Laundering

Techology is playing an increasingly important role in combating money laundering. Advanced analytics, artificial intelligence (AI), and machine learning can help financial institutions identify patterns and trends indicative of money laundering activities more quickly and accurately.

One leading provider of AML solutions is Tookitaki. Their Anti-Money Laundering Suite (AMLS) helps financial institutions:

  • Automate compliance processes
  • Reduce false positives
  • Increase AML programs’ efficiency

Tookitaki’s Best Practices and Real-World Typologies

Tookitaki’s AML solutions incorporate best practices and real-world typologies of money laundering schemes. Their Typology Repository contains valuable information shared by financial institutions, regulatory bodies, risk consultants, and others worldwide. This information empowers financial institutions with valuable insights into evolving AML risks.

The AMLS collaborates with the Typology Repository through federated machine learning, enabling financial institutions to stay informed of the latest developments and threats and adjust their AML programs accordingly.

Conclusion

The fight against money laundering in Egypt requires a multifaceted approach. Regulatory bodies, financial institutions, and technology providers must work together to enhance the effectiveness of AML processes, prevent financial crime, and promote a more transparent, sustainable financial system for all.