The Central Bank of the UAE (CBUAE) recently published the ‘Typologies in the Financial Sector’ report curated by the Supervisory Authorities Sub-Committee under the chairmanship of the CBUAE. The Supervisory Authorities Sub-Committee consists of the Abu Dhabi Global Market and Dubai Financial Services Authority, the Executive Office for Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT), and the UAE Financial Intelligence Unit (FIU).
The typology report is aimed at identifying emerging risks in the financial sector and raising awareness in order to enhance vigilance among the concerned supervisory authorities and Financial Institutions (FIs). With increased awareness, the concerned authorities will be able to address the challenges in a timely and effective manner.
The report analyses the most common risks among FIs in order to develop the best practices to handle them. As part of the report, concerned authorities have selected a pilot group of FIs to identify the unique risks looming upon the sector as well as exacerbated by the COVID-19 pandemic.
Some of the typologies identified in the report are risks related to money laundering, terrorist financing, fraud, bribery, corruption, charity and disaster fraud, cyber-attacks and external fraud caused by the COVID-19 pandemic.
The report further pointed out that the risks derived from identified typologies are in addition to the prevailing risks of crimes such as money laundering and terrorist financing as outlined in the UAE’s National Risk Assessment. The report added that these risks such as increase in the use of unlicensed money service providers and a heightened risk of cyber-attacks are likely to be prevalent across the wider financial sector.
The report also provides best suited methods to FIs to identify, mitigate and resolve the risks in addition to the conduct trend analyses of risks managed.
CBUAE Governor Khaled Mohamed Balama noted that the report is a part of the institution's ongoing efforts to address money laundering and terrorist financing-specific trends as well as other typologies emerging from the COVID-19 pandemic in the financial sector. He further noted that these risks are still in the early stages of identification.
"CBUAE alongside the concerned supervisory authorities, have released this report as key reference on pandemic-related typologies and indicators to the financial institutions, so they remain abreast of and be able to mitigate these emerging risks, which ultimately contribute to safeguarding the integrity of the UAE financial system," he added.