Financial Crime Trends and Predictions in Saudi Arabia Set to Escalate
Financial Crime Compliance Costs on the Rise in UAE and Saudi Arabia
A new report by LexisNexis Risk Solutions warns that financial crime compliance costs in the United Arab Emirates (UAE) and Saudi Arabia are set to escalate. The combined financial crime compliance costs in these countries reached an estimated US$1.8 billion last year, according to a research commissioned by LexisNexis.
Key Findings
- 98% of decision-makers polled experienced increased financial crime compliance costs in the UAE and Saudi Arabia.
- Labor, technology, and external costs related to outsourcing were identified as the biggest cost drivers.
- Trade-based money laundering schemes, supply chain disruptions, and bribery within supply chains are growing concerns in both countries.
Evolving Financial Crime Landscape
The report highlights the importance of prioritizing financial crime compliance and optimizing costs to remain agile in adapting to evolving regulatory requirements. Financial institutions in EMEA are prioritizing harnessing enriched payment data to improve the effectiveness and efficiency of compliance controls.
Emerging Threats
- Technologies such as cryptocurrencies, digital payments, and artificial intelligence (AI) are being used for illicit activities.
- 25% of companies reported significant increases in financial crime involving digital payments and 23% cited heightened use of both cryptocurrencies and AI.
Regulatory Pressures and Challenges
The report notes that regulatory pressures and challenges faced by financial institutions in the UAE and Saudi Arabia. The total cost of financial crime compliance in the EMEA region reached US$85 billion in 2023, with Germany, France, and the Netherlands leading the expenditure.
Key Factors Driving Compliance Costs
- Heightened financial crime regulations and regulatory expectations
- Increased requirements for automation, data, and tools to support financial crime compliance
- Evolving criminal threats