Kuwait Banks Take Proactive Measures to Prevent Financial Crimes

Central Bank of Kuwait Implements Stringent Guidelines to Safeguard Clients

In a bid to counter financial fraud, the Central Bank of Kuwait (CBK) has taken numerous measures aimed at protecting clients and preventing unauthorized transactions. These efforts have been implemented through directives for financial institutions and banks, as well as awareness campaigns targeting the general public.

Key Initiatives Undertaken by the CBK

• Enhanced Governance and Administrative Responsibility: The CBK issued guidelines to banks in 2019 to enhance governance and administrative responsibility within their operations. These guidelines have been designed to act as a safeguard against financial fraud and have become a common practice among Kuwaiti banks.
• Strategic Framework for Cybersecurity: In February 2020, the CBK finalized a strategic framework for cybersecurity in the banking sector, which includes minimum requirements for governance, risk management, and online security systems. The bank has mandated that all local banks implement this strategy and inform clients of suspicious activities, recommending password changes and other measures to prevent unauthorized transactions.

Recent Measures Implemented by the CBK

• Payment Links for Individuals: In April 2023, the CBK issued a memo to local banks regarding payment links for individuals, requiring clients to provide necessary information from banking statements, including names and reasons for payments. The bank has also set daily and monthly value ceilings for these transactions, which must be completed within 24 hours.
• Cyber Unit Establishment: The CBK established a cyber unit in December 2022 to gather complaints against local banks and provide support to affected individuals.

Boosting Public Awareness of Financial Fraud

The bank’s measures also focus on boosting public awareness of financial fraud through campaigns such as “Let’s Be Aware,” which saw cooperation from the public and private sectors, as well as participation from experts. The campaign aims to prevent online fraud and create a culture of awareness among Kuwaiti citizens.

Additional Measures to Prevent Financial Crimes

• Ban on Malicious Applications: In September, the CBK banned the use of the malicious “Anydesk” application on smartphones, tasking the Kuwait Banking Association (KBA) to establish a round-the-clock-command center to deal with financial fraud and reports from clients.
• Card Activation and Locking: The bank has made it imperative for banks to remind clients to activate their cards before usage and lock them after three failed password attempts.

These efforts demonstrate the CBK’s commitment to protecting clients and preventing financial crimes in Kuwait, ensuring a safe and secure banking environment for all citizens.