These are the most threatening risks for banks and financial institutions...

These are the most threatening risks for banks and financial institutions...
These are the most threatening risks for banks and financial institutions...

The Central Bank of the United Arab Emirates issued the report “Risk Patterns in the Financial Sector”, which was prepared by the Subcommittee on Regulatory Agencies, chaired by the Central Bank, and includes Abu Dhabi Global Market, the Financial Services Authority, the Executive Office for Combating Money Laundering and the Financing of Terrorism, and the Financial Information Unit .

The report seeks to identify emerging risks in the financial sector and raise awareness about them, with the aim of empowering relevant regulatory bodies and financial institutions To prepare to address these risks in a timely manner.

The report revealed the most common risks among financial institutions and the best practices used to confront them, as a group of financial institutions were selected on an experimental basis to determine the exceptional risks prevailing in the sector, which were exacerbated by the Covid-19 pandemic.

The risk patterns identified in the report include money laundering, terrorist financing, fraud, bribery, corruption, charitable and disaster fraud, cyber attacks and external fraud caused by the COVID-19 pandemic.

The report indicated that the risks derived from the identified patterns are in addition to the risks described in the national assessment of the risks associated with money laundering and terrorist financing crimes, as they are likely to be more prevalent in the financial sector, such as the increased dealings with unlicensed financial service providers and the escalating risks of cyber-attacks.

The report shows the effective methodologies applied by financial institutions to identify and identify risks, mitigate them and find solutions to confront them, in addition to analyzing the observed risk trends.

Khalid Mohammed Salem Balama, Governor of the Central Bank of the UAE, said: This report comes within the framework of continuous efforts to confront trends and developments related to money laundering, terrorist financing and emerging risk patterns in the financial sector in light of the Covid-19 pandemic.

He added: Although the identification of these risks is still in the early stages, the Central Bank has issued this report in cooperation with the relevant regulatory authorities, in order to be a main reference for financial institutions regarding patterns and indicators of risks related to the pandemic, to help them know and reduce emerging risks. Which contributes to maintaining the integrity of the financial system of the state.

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