Seamless Middle East: Conference Takeaways Q&A with Tejal Kaur

 

Feedzai had the amazing opportunity to attend the Seamless Middle East conference in Dubai this past May. We’re excited to share some exclusive insights from the Feedzai team about the hottest trends shaping fraud and financial crime in the region.

Q: What themes did you observe at Seamless Middle East?

A: A major focus at the show was on the role of regulators in the region, particularly the Saudi Central Bank (SAMA) and the Central Bank of UAE. New regulations are rapidly being introduced, with a recent example being the requirement for 24/7 fraud detection capabilities for banks. This is a direct response to how quickly and cleverly fraud and financial crime is evolving.

Another major trend we saw was the rise of criminal groups recruiting “money mules” from neighboring countries. These folks are brought into the region to open bank accounts, which fraudsters then use for illegal activities or to cash out fraudulent loans.

The UAE is home to a sizable expatriate population (92%),¹ making these individuals prime targets for mule recruitment. Many expats aren’t familiar with local laws, and if a job falls through, they might be tempted to accept job offers connected to money mule activity. 

There were also concerns that some expats are arriving in the UAE to set up business accounts to avoid normal bank defense measures. When they leave, they sell their bank accounts to fraudsters.   

Q: What was the hot topic everyone was buzzing about?

A: Beyond money mules, there was a lot of chatter around Artificial Intelligence (AI) and machine learning, and the growing impact of real-time or instant payments. While the region has traditionally relied on rules-based systems, there is an undeniable push to adopt AI. This reflects a growing recognition that traditional methods struggle to keep pace with the new fraud threats. 

During a fireside chat at Seamless Middle East, I was joined by Jo Jeyaseelan, Head of Fraud Risk at Wio Bank. She eloquently said, “It’s not about who has AI, it’s about who uses it well.”

“AI has changed the game, helping us stop fraud in real time, tailor risk, and protect customers with less friction,” she continued. “Fraud evolves fast, and so do we,” tempted by a fake job offer that involves accepting and moving money.

This statement underscores the need for banks to shift their approach to AI. For this to happen, banks must also focus on preparing their data and ensuring it is ready for effective fraud transformation.

Q: What did people say about changing consumer behavior or expectations?

A: Being home to such a large expat community, consumer behavior is difficult to predict reliably. That’s because there isn’t a strong sense of permanence among residents. The UAE’s diverse population and financial services ecosystem demonstrates the need to prioritize hypergranular profiling based on each consumer’s unique behaviors and attributes instead of as part of a cohort.

This presents challenges because it’s sometimes difficult to distinguish between an expat committing fraud and a legitimate customer. Banks are also facing greater pressure as regulators demand more advanced fraud warnings be implemented. This requires investment in advanced technologies that can quickly identify red flags before criminals can profit. 

At the same time, these requirements also raise concerns that banks will face more false positives. When these new regulations go into effect, banks must ensure they can deliver a seamless user experience that helps them retain their customers and attract new ones.

Q: What are the most-anticipated trends or changes coming out of the Middle East market?

A: There’s a noticeable shift away from relying on consortium models for fraud prevention. It’s risky to depend too heavily on these models because the data can quickly become outdated. 

That’s because identities are easy to acquire and dispose of in this region. Fraudsters are also less likely to reuse the same credentials. Meanwhile, there’s discussion that synthetic identities are being used for fraud, despite the availability of Emirates ID as a control for UAE citizens in their banking journeys. 

Instead of consortium models, a new approach is to share network-based insights. This approach keeps customer data private and secure while using federated learning to offer banks and financial institutions actionable insights. Banks can quickly understand a transaction’s risk based on real-time network intelligence. The ability to leverage insights based on fraud insights observed by other banks will be incredibly invaluable to fighting fraud, especially for those without their own fraud data.

Conclusions

The Seamless Middle East conference really highlighted how quickly the financial market in the region is changing due to new regulations and the rise of financial crime. The urgent need for 24/7 fraud detection and the alarming increase in large-scale money mule operations and synthetic identity fraud clearly show that we need advanced, real-time defenses.

Investing in AI-powered, real-time fraud detection is essential to address modern sophisticated threats and meet evolving regulatory demands. Embracing collaborative intelligence sharing and moving towards network-based insights will also be crucial for building a truly resilient financial ecosystem in the region.

Resources

• Blog: Synthetic ID Fraud: Everything You Need to Know
• Report: AI and the Fight Against Money Mules: New Tools for an Old Crime
• Case Study: Feedzai’s Digital Trust Helps Challenger Bank Take on Money Mule Networks and Protect Customers
• Solution: Feedzai Orchestration