The worldwide crackdown on money laundering has created a massive opportunity for firms such as Dubai-based EastNets that offer payments and security software.
Money laundering is the world’s third largest “business” with a volume of $1.5 trillion (Dh5.5trn), according to international experts. Countries around the world are stepping up efforts to detect it while criminals continue to develop increasingly sophisticated methods to conceal the origins of their cash.
Banks, stock exchanges and other financial organisations will have to spend billions of dollars over the next few years on software to counter money laundering following the introduction of tough new laws. The programs automatically track suspicious transactions.
“More than 80,000 financial bodies worldwide will need software and solutions for anti-money laundering services,” said Hazem Mulhim, Chairman and CEO of Eastnets. “Today all financial institutions globally are required to monitor, investigate and report transactions of suspicious nature to the financial intelligence unit of the central bank in the respective country.”
Mulhim said he expected his company’s assets to grow from $30 million to $100m within the next five years due to the expansion of the business. “Regulators worldwide are introducing new procedures and rules for money transactions, so banks and financial corporations will need software to meet these requirements.
“Our business covers many areas, including software for financial transactions in government and central banks, commercial and investment banks, money exchange companies and even health services and insurance.
“There are also service centres that link banks and financial bodies. EastNets’ service bureau in Dubai is connected to more than 200 banks and financial institutions in the region, including five central banks and two stock exchanges. This will help control and investigate any money laundering activity.”
The introduction of new measures to combat money laundering and the financing of terrorism began after the September 11, 2001, attacks. Government and private financial bodies are installing software, which can monitor, detect and identify money laundering activities in financial transactions.
An anti-money laundering system pulls together customer data, rates the level of suspicion of transactions from low risk to high, builds patterns of customer behaviour and searches for anomalies such as sudden surges in funds or huge withdrawals. “Recently Union Bank of California in the US entered into a deferred prosecution agreement on charges of failing to maintain an effective anti-money laundering programme and was fined $21.6m,” said Mulhim.
“This is an example of the penalties banks will face if they fail to install effective anti-money laundering systems.” He said the proposed single GCC currency would create huge potential for anti-money laundering systems as all financial institutions in the region would have to integrate their systems.
“The region is very promising. Experts estimated that the need for anti-money laundering measures in the region will increase between six and 10 per cent annually during the coming decade.”
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