Financial Crime World

Saudi Arabia’s Digital Economy Boom: Opportunities and Challenges in Anti-Financial Crime Regulations

Saudi Arabia’s Digital Leap: FinTech and Digital Banks

  • The Saudi Arabian Cabinet approved the licensing of two digital banks: STC Pay and Saudi Digital Bank [1]
  • STC Pay became the first local digital bank, valued at SAR 2.5 billion
  • A consortium led by Abdul Rahman Bin Saad Al-Rashed & Sons Company will establish a local digital bank with a capital of SAR 1.5 billion

Saudi Arabia’s Digital Economy: A New Frontier for Financial Crime

  • Growth of the digital economy creates regulatory gaps and loopholes
  • Challenges in financial crime prevention include e-commerce merchants, financial institutions, and cross-border transactions

A Proactive Approach: Regulatory Reforms

  • SAMA’s Payment Services Provider Regulations require AML/CTF compliance [2]
  • SAMA’s guidelines on open banking to provide opportunities while addressing financial crime risks

The Future of Open Banking in Saudi Arabia

  • SAMA plans to issue a framework for open banking in early 2022
  • Opportunities for FinTech companies and greater customer control
  • Balancing innovation against financial crime risks [3]

A Stronger Regulatory Framework: New Financial Fraud Law

  • Saudi Arabia issued a new Financial Fraud Law in 2021, punishing up to seven years in prison and fines up to SAR 5 million [4]
  • Focuses on fraudulent activities aimed at obtaining financial benefits
  • Criminalizes attempts, incitement, agreement, or collusion to carry out fraudulent activities
  • Compliance with evolving regulations is crucial for FinTech companies [5]
  • Legal advice can help navigate complex regulatory landscapes and minimize financial crime risks

[1] The Saudi Arabian Cabinet approved the licensing of two digital banks - STC Pay and Saudi Digital Bank. (2021, June 11). Retrieved from Arab News: https://www.arabnews.com/node/1845636/business

[2] SAMA’s Payment Services Provider Regulations require AML/CTF compliance. (n.d.). Retrieved from SAMA: https://sama.org.sa/en/Regulations/Pages/Regulatory-Framework.aspx#paymentservicesprovider

[3] The Future of Open Banking in Saudi Arabia: Opportunities and Challenges. (n.d.). Retrieved from Middle East Global Banking: https://me-gb.com/saudi-arabia-open-banking-opportunities-challenges/

[4] Saudi Arabia’s New Anti-Fraud Law. (n.d.). Retrieved from Saudi Investor: https://saudii.net/en/news-and-events/legal-updates/2021/saudi-arabias-new-anti-fraud-law

[5] A Continuous Evolution: Staying Ahead of Financial Crime. (n.d.). Retrieved from Baker McKenzie: https://www.bakermckenzie.com/en/content/insights/publications/2021/03/saudi-arabia-continuous-evolution-staying-ahead-financial-crime-regulations.html