News & Events
The Rise of RegTech in the UAE
Regulators worldwide are racing to keep up with developing frameworks and procedures to combat the growing concern for transparency and accountability, especially when fighting Money Laundering activities. With hopes of uncovering illicit finds, regulators are issuing various new regulations, and failure to comply with such requirements leads companies to hefty penalties and damaged reputations. RegTech is becoming crucial due to the growing demand for financial services. Recently, the United Arab Emirates (UAE), a thriving financial centre in the Middle East, has been increasing interest in combatting their country’s money laundering activities through Regulatory Technology. The UAE has recently reaffirmed its commitment to counter financial terrorism by introducing AML legislation. It has shifted towards Regulatory Technology to cope with the growing AML requirements and mitigate risks associated with financial crimes. The UAE has also overseen the establishment of a National Committee to oversee the implementation of the AML legislation. It has created an AML reporting platform called “goAML”. This platform is an application developed by the UN Office on Drugs and Crimes (UNODC) and essentially acts as a tactical response to combat organised financial crimes such as money laundering. The UAE’s financial intelligence unit collects information and intelligence from all over the country to keep an eye on suspicious transactions and prevent further crimes by collecting and analysing the data.
The legal framework regarding AML in the UAE comprises of federal decrees and circulars, with additional AML frameworks occurring in Financial Free Zones, such as the Dubai International Financial Centre (DIFC) and the Abu Dhabi Global Market (ADGM). Financial institutions are now required to enhance their AML policies and procedures, which they can do so by investing in sophisticated technology. Initiatives are taking place around the UAE, with the ongoing promotion and recognition of RegTech, with both global and home-grown RegTech players quickly entering the UAE market – and the adoption of RegTech is highly encouraged. RegTech has a promising future in the UAE. With multiple RegTech players in the market, reporting entities must carefully consider their options and select the right RegTech provider, ensuring they meet all the necessary regulatory criteria.
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