Babar Muhammad

In lines to the recently launched #FinTech #Strategy, #DLT guidelines are issued by #Qatar central Bank (QCB). As requested, attaching the guideline for ease of reference Few Highlights -  ✔ This guideline covers the interaction with or use of #DLT by an #Entity in any form  ✔ Provide requirements for the #oversight of DLT #applications or #systems provision and usage by all Entities regulated by #QCB to ensure their usage is #safe, #secure, and #efficient   ✔ Set out principles or "best practice standards" that govern the conduct of an Entity who shall make every effort to comply with this guideline as part of their regulatory obligations. This covers requirements specific to ➕ DLT #Strategy for the licensed entities – Internal and external usage purposes ➕ #Corporate #Governance, #Internal #controls ➕ #Risk #management related requirements ➕ #DLT #register and assessment requirements ➕ #Outsourcing activities ✔ Set requirements on the way that an Entity should manage its DLT activities and specific DLT types #DLT #FinTech #Innovation #Guidelines #Strategy #Digital #Permissionednetworks #Remittance #QCB #Doha #Financialservices #emergingtechnologies

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Alleged IDOR Vulnerability in Al Rajhi Bank’s APIs for Sale An alleged Insecure Direct Object Reference (IDOR) vulnerability in Al Rajhi Bank’s APIs has surfaced on the dark web. This vulnerability, if genuine, could potentially allow unauthorized access to sensitive customer data by manipulating API endpoints. IDOR vulnerabilities occur when an application exposes direct references to internal objects, such as database records, without proper access controls. This means that attackers can manipulate these references to access or modify data they shouldn’t have access to. According to reports, the vulnerability is being sold on the dark web, raising significant security concerns. The seller claims that exploiting this vulnerability could grant access to a wide range of sensitive information, including personal and financial data of Al Rajhi Bank’s customers. Organizations can mitigate the risk of IDOR vulnerabilities by implementing strict access controls, conducting regular security audits, and employing secure coding practices. Ensuring that all user inputs are properly validated and access permissions are rigorously enforced can help prevent such vulnerabilities. https://lnkd.in/gm8apTpd

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This was an interesting read. "With Innovation in the Payments systems, there needs to be Innovation in supervision... Same business, same risks, same rules approach should apply". What are your thoughts?

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3 AML Killers: Key Lessons from TD Bank and Others for a Stronger AML Defense. #FinCEN fined #TDBank $1.2 billion for violating the #BSA, the primary U.S. #AML law. The largest penalty against a depository institution in U.S. Treasury and FinCEN history. This isn't the first or the last, just this week #MetroBank was fined by the #FCA. Its automated transaction monitoring system did not work as intended & had serious deficiencies. You might be at risk too if you do not: ✅Invest in tech ✅Empower people ✅Monitor & improve and here’s why. TD Bank failed to limit or report suspicious transactions including criminal activity properly. The filing cited issues with the #transactionmonitoring program: 1. Program remained effectively #static, and did not adapt to address known and emerging money laundering risks 2. AML projects were postponed and cancelled #prioritising a “flat cost paradigm” and the “customer experience.” 3. Unmonitored #transactions & failure to report left 92% of total transaction volume unmonitored from 2018 to 2024. This is a stark reminder of the need for robust monitoring processes and technological infrastructure in the financial sector. It shows inadequate systems and processes lead to severe consequences regulatory penalties and reputational damage. So, here are the 3 killers: ❌Out of date compliance tech ❌Underpowered teams ❌Static processes To address these killers you must: 1️⃣ Prioritise your tech stack. 👍 ⋆ Ensure your AML and KYC systems are up-to-date and effective. ⋆ Integrate data and systems to flag suspicious activities across all channels. 2️⃣ Empower your compliance teams👍 ⋆ Train and equip your teams with the knowledge and tools. ⋆ Show them how to monitor and report effectively. ⋆ Establish the right escalation procedures. 3️⃣ Improve continuously 👍 ⋆ Regularly assess and upgrade your technology. ⋆ Stay ahead of evolving products and financial crimes. ⋆ Investigate incidents and escalation procedures thoroughly. Remember to invest in people and technology not just to avoid fines. Instead: build trust (in people & systems) ensure compliance 🛡️& safeguard future 🏦 Message me if you want to learn more about how DLT Apps can help address these killers using Qkvin. 🔁 Helpful? [ 𝗿𝗲𝗽𝗼𝘀𝘁 ] 👋 Nice story [ 𝗹𝗶𝗸𝗲 ] 🔔 Follow [ Mahesh Patil ] 💬 Anything else, please comment below #FinTech #ComplianceTech #BankingInnovation #AML #InvestInTech #RegTech #TransactionMonitoring #FinancialServices #ContinuousImprovement

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Uneven Regulations in Payments  This report by BAFT Global Payments Industry Council highlights how the business industry may be susceptible to significant risks posed by diverse entities and the prevalent issues of money laundering, cross border terror financing and other financial crimes. ✅ Financial Institutions, banks and NBFIs engage in domestic and cross-border payments to conduct business, and must stay in compliance with regional and international regulations to prevent money laundering, fraud, and other financial crimes. ✅ Prevalence of discrepancies in customer due diligence requirements, regulatory oversight, and cross-border activities between banks and NBFIs could result in financial crimes and frauds. ✅ NBFIs provide money and payment services from consumer to consumer (C2C), consumer to business (C2B), and business to business (B2B). However, NBFIs have higher susceptibility to financial frauds. ✅ Regulatory oversight should be activity-based to ensure uniform application across all the stakeholders. Consistent KYC requirements for both banks and NBFIs are crucial to mitigate risks associated with financial crimes and frauds. ✅ Well defined rules for cross-border transaction activities, data requirements for sanctions and Anti-Money Laundering (AML) monitoring, and regulatory reporting are essential to ensure compliance and strengthen the cross-border payments system. ✅ Regulations should be driven by the risk of the service or solution, and the underlying principle should be “same risk, same rules”. ✅ International stakeholders and organizations like the Financial Action Task Force (FATF), the Committee on Payments and Market Infrastructures (CPMI), and regional bodies, play a vital role in promoting uniform regulations across diverse regions of the globe. ✅ Collaboration among central banks, industry associations, and law enforcement agencies is also crucial to enhance security and protection of the associated stakeholders.

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Yes, the plot deepens! The U.S Treasury, in collaboration with international partners which includes the UAE Government , the UK's National Crime Agency, and FinCEN, has imposed sanctions on a money laundering network of companies, its partners and employees who uses digital assets to facilitate significant sanctions circumvention on behalf of Russian elites. This network provides a range of services to obfuscate illicit financial activities, including laundering funds associated with sanctioned entities, exchanging cash and cryptocurrency, and also helps high netwoth Russian individuals to purchase property in the UK by obfuscating the source of funds. #OFACSanctions #VirtualAssets #SanctionsEvasion

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Our Director of Financial Crime Conduct, Supervision, Sara Kalban, hosted a panel at the National Summit on Financial Crime Compliance organised by the Central Bank of the United Arab Emirates (CBUAE) looking at collaboration between supervisory authorities. Speaking alongside Maroof Saiyed, Mohammed Sultan Janahi, and Marius Laurinaitis, the panel explored the frameworks and practices that enhance cooperation among our supervisory bodies, fostering a robust environment for compliance and oversight. As we navigate an increasingly interconnected regulatory landscape, effective joint supervision and information sharing are more critical than ever. The Financial Action Task Force (FATF) standards underscore the importance of collaboration between supervisory authorities in several key areas, including joint supervision and information sharing. Thank you to the panellists and to all those who attended what was an engaging discussion. #AML #CBUAE #FATF #Regulation #regulator #DFSA #financialcrimecompliance #financialcrime #supervisory #supervision

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The FATF is considering changes to “Recommendation 1” of its 40 key recommendations. The aim is promote financial inclusion, focusing on proportionality in AML compliance. Proposed revisions target simplified measures for low-risk cases, replacing “commensurate” with “proportionate” language, and encourage non-face-to-face transactions where appropriate risk controls exist. The FATF has announced a global consultation on these changes.  The revisions focus on Recommendation 1 and its Interpretive Note, with corresponding changes to Recommendations 10 and 15 and related Glossary definitions. These proposed revisions aim to better promote financial inclusion through increased focus on proportionality and simplified measures in the risk-based approach, and to give countries, supervisors, and financial institutions greater confidence and assurance when implementing of simplified measures. FATF is considering the replacement of the term “commensurate” with “proportionate” in Recommendation 1, in order to clarify how these concepts should be applied in the context of a risk-based approach; to set clearer expectations with regard to simplified measures; and to align the FATF’s language more closely with that of financial inclusion stakeholders and frameworks. For these purposes, the term “proportionate” is defined as follows: “In the context of the risk-based approach adopted by the FATF Recommendations, a proportionate or commensurate measure or action is one that appropriately corresponds to the level of identified risk and effectively mitigates the risks”.  FATF is considering amendments to require supervisors to “review and take into account the risk mitigation measures undertaken by financial institutions/DNFBPs”, to avoid overcompliance resulting from an only partial understanding of the risks, and also to consider proportionality in the engagements with them. On adoption of simplified measures in lower risk situations, FATF proposes to replace “countries may decide to allow simplified measures” with “countries should allow and encourage simplified measures”. This would place an explicit requirement on countries to be more active in creating an enabling environment for implementation of simplified measures. On “non-face-to-face customer-identification and transactions” as an example of potentially higher-risk situations, addition of qualification (“unless appropriate risk mitigation measures have been implemented”) to reflect technological advancements in digital identity systems that may reduce the risks associated with non-face-to-face interactions, and recognise that in many countries this has become the normal mode of interaction with financial institutions.

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Digital Asset Regulation 2024 Weekend Read! Association of Certified Financial Crime Specialists - ACFCS ACFCS MENA Chapter #digitalasset #regulations

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Breaking news on Friday afternoon: AML/CFT Guidance for VASPs How the NZ AML/CFT regime applies to virtual asset service providers ("VASPs" - eg crypto issuers, wallet providers, payment networks and exchanges) has been a topic of debate for many years, and the ambiguity continued despite the recent VASP regulations. Today, the Department of Internal Affairs (DIA) released guidance (Guidance) for virtual asset service providers (VASPs) on the stage 2 amendment regulations under the Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) Act 2009 (Act). The Guidance gives direction to VASPs in understanding how to approach virtual assets, their quasi-money treatment, and the nature of transfers involving them. It also makes clear the consequences of virtual assets being pulled into the wire transfer regime – that short change of definitions actually represents what is likely the most substantive impact for VASPs, but may not have been understood by all from what is on the regulations’ pages. Many thanks to Sam Short and Darlene Hu for your help putting the note together! And to Jeremy Muir who is buried in the Reserve Bank's CBDC working group today - noting that digital representations of fiat are carved out from virtual assets!

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#QCP, a global institutional digital assets company, today announced that they have received In-Principle Approval (#IPA) from the Financial Services Regulatory Authority (#FSRA) of Abu Dhabi Global Market (#ADGM) to conduct regulated activities. The decision to make a move into this strategic #market for the company’s footprint was in anticipation that the #MiddleEast is going to become a dominant global hub for capital flowing into traditional and digital assets. #TheFinancial #UAE #AbuDhabi

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Enhanced Due Diligence (EDD) helps understand and mitigate risks associated with high-risk customers. DNFBPs and VASPs must carry out EDD for high-risk customers as per the UAE AML regulations. Here is the article describing step-by-step procedures for performing effective Enhanced Due Diligence. Read the blog article now to understand how to undertake an effective EDD process. Article Link: https://lnkd.in/dtHsYRST #AML #AMLCFT #AMLCompliance #AntiMoneyLaundering #DNFBPs #Compliance #Risk #AMLSoftware #ScreeningSoftware #KYCSoftware #HighRisk #EDD #DueDiligence #EnhancedDueDiligence

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The UAE AML/CFT Partnership Forum's Digital Work Group has released a white paper on technologies used in combating financial crime. ABU DHABI, 3rd April, 2024 (WAM) -- Hamid AlZaabi, Director-General of the Executive Office of Anti-Money Laundering and Counter Terrorism Financing (EO AML/CTF), received the first copy of the white paper titled "Current Views on Technologies in Anti-Financial Crime" during the EO AML/CTF Ramadan event. This white paper was published by the UAE AML/CFT Partnership Forum's Digital Working Group. Upon receiving the paper, AlZaabi remarked, "Public-private sector partnership is a top strategic priority for the UAE. The EO AML/CTF places significant emphasis on the AML/CFT Partnership Forum (ACPF) projects due to their crucial role in fostering dialogue with the private sector. The publication of this paper exemplifies the productive outcomes of the collaboration between the public and private sectors and the exchange of expertise to better identify and combat threats of money laundering and terrorism financing. Click the link below for further details https://lnkd.in/ghQh42mk

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Standard Chartered launches UAE digital asset custody service 🇦🇪 Standard Chartered has launched a new digital asset custody service in the UAE following the receipt of a licence from the Dubai Financial Services Authority (DFSA) with Brevan Howard Digital confirmed as the inaugural client. The service, which enables clients to safeguard their digital assets, will initially support th two largest cryptocurrencies by capitalisation – bitcoin and ether – and marks a significant milestone in the Bank’s digital asset strategy. BH Digital is the dedicated crypto and digital asset division of hedge fund Brevan Howard. In a press statement, Bill Winters Group Chief Executive of Standard Chartered Bank, said: We firmly believe that digital assets are not merely a passing trend, but a fundamental shift in the fabric of finance. Our robust infrastructure, coupled with our expertise in the field allows us to provide a bridge between the world of financial services and the emerging digital asset ecosystem.” Gautam Sharma Chief Executive Officer of Brevan Howard Digital said: “Standard Chartered’s global reputation and demonstrated commitment to this space adds a layer of credibility that is meaningful for institutional adoption. The development of the institutional infrastructure within the asset class and region supports our established business within the ADGM in its continued expansion and our ongoing efforts toward improving and reinforcing standards in the digital asset ecosystem.” The Bank plans to broaden its scope in the coming months to encompass a wider range of digital assets, and is actively exploring opportunities to extend its custody services to other key financial hubs in its footprint markets. #crypto #banking #digitalasset #dubai

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Next generation correspondent banking. Key takeaways • Existing correspondent banking processes have struggled to adapt to new regulatory and supervisory requirements, posing questions on the future of the correspondent banking model. • The tokenization of correspondent banking, as embodied in Project Agorá (BIS (2024b)), could unlock streamlined pre-screening and atomic settlement, and pave the way for superior customer verification and anti-money laundering (AML) procedures. • Tokenization could substantially reduce duplication and miscoordination, thereby revitalizing cross border payments by fostering a robust network of correspondents and corridors. Bank for International Settlements – BIS Bulletin - https://lnkd.in/gj7bC7qw #payments #tokenisation #rln #banking #financialservices

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Unlock the secrets to fighting financial crime in the Middle East with insights from the brilliant Sheetal R Bhardwaj! As the region’s economy grows, so does financial crime. Join us to explore the current AML landscape and discover straightforward strategies to tackle compliance issues. 🚀 Read the full article here ➡️ https://sumsub.link/x8g #AML #FinancialCrime #MiddleEast #Compliance #Sumsub

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The report highlights the UAE's progress in combating money laundering and the financing of terrorism. It outlines roles of national entities, including the Higher Committee Overseeing National Strategy on Anti-Money Laundering and Countering Financing of Terrorism, and the EO AML/CTF as the national coordinator, alongside various entities, committees and working groups from supervisory authorities and law enforcement agencies that contribute and enhance the effectiveness and sustainability of the national AML/CFT framework. https://wam.ae/a/b3m1ew9

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Great article by Barbara Pianese. Banks have developed processes around managing Financial Crime regulatory risks. We still see significant time delays from the transaction to the alert, to the investigation to the suspicious activity reporting. That paradigm is shifting with transaction screening of customers and counterparties at scale with AI in parallel to the transaction stream. We have seen a new approach adopted by the top FIs. Protecting customers not only from sanctions risk but over 50+ risk typologies. Quantifind #makeadifference #followthemoney.

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Banks struggle on compliance with staff WhatsApp bans as regulators dish out heavy fines Investment banks are increasingly struggling to get workers to comply with bans on using WhatsApp for business communication, a new survey suggests, after a slew of heavy regulatory penalties. Nearly two-thirds (65.2 per cent) of compliance professionals found “getting staff to comply” was their biggest challenge with communication channels, according to an industry-wide survey of major financial companies in the UK, US and Europe by tech firm Global Relay. This figure is up from 61.5 per cent in 2023 and comes as regulators in the UK and US crack down on so-called off-channel communications. #regulation #compliance #whatsapp

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