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AML Challenges in the UAE: New Regulations and Technology Can Help

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Tookitaki
25 Apr 2022
5 min
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Earlier in March, global money laundering watchdog Financial Action Task Force (FATF) placed the UAE in its list of ‘jurisdictions under increased monitoring’ or the so-called grey list.

There are views that the country has inherent vulnerabilities to illicit finance due to its financial importance in the Middle East region.

Following its greylisting, the country has introduced stricter regulations and has been very keen to enforce them. The country is surely in the right direction with its latest reforms to address money laundering.

Meanwhile, financial institutions that guard the financial system should proactively develop effective anti-money laundering (AML) compliance programmes, leveraging the strengths of modern technology.

 

The Criticisms

The UAE has long been criticised for its absence of financial transparency. It is relatively easy to get a residential visa if a person invests in a business or property there.

Ever since the Western nations imposed sanctions on Russia, following its attack on Ukraine, there seems to be increased interest towards the UAE from Russians, according to a report by DW. There are concerns that the country will turn into an “even greater hub for Russian oligarchs” who look to escape Western sanctions and protect their wealth.

Jodi Vittori, a professor at Georgetown University in Washington and expert on corruption, who was quoted by DW, alleged that the flow of ill-gotten Russian gains has actually been washing through Dubai since the late 1990s.

He added that the UAE authorities don't collect the relevant information when foreign nationals make investments in the country, making it “a one-stop shop for illicit finance”.

The report also highlighted issues such as the lack of transparency in business ownership, the presence of 39 different company registries across the UAE’s seven emirates and the establishment of more than 40 "free zones", where foreigners can locate or relocate companies.

 

What Reforms Are Required?

The FATF lists out the following action items for the UAE to strengthen the effectiveness of its AML regime.

 

  • Demonstrating through case studies and statistics a sustained increase in outbound requests to help facilitate investigation of terrorist financing (TF), money laundering (ML), and high-risk predicate offences
  • Identifying and maintaining a shared understanding of the ML/TF risks between the different Designated Non-Financial Business and Profession (DNFBP) sectors and institutions (eg. real estate developers, dealers in precious metals and stones, law firms)
  • Showing an increase in the number and quality of Suspicious Transaction Reports (STRs) filed by financial institutions and DNFBPs
  • Achieving a more granular understanding of the risk of abuse of legal persons and, where applicable, legal arrangements, for ML/TF
  • Providing additional resources to its financial intelligence unit (FIU) to strengthen its analysis function and enhance the use of financial intelligence to pursue high-risk ML threats, such as proceeds of foreign predicate offences, trade-based ML, and third-party laundering
  • Demonstrating a sustained increase in effective investigations and prosecutions of different types of ML cases consistent with the country’s risk profile
  • Proactively identifying and combating sanctions evasion, including by using detailed guidance in sustained awareness-raising with the private sector and demonstrating a better understanding of sanctions evasion among the private sector

 

Regulatory Changes So Far

The FATF noted that the UAE has addressed more than half of the key recommended actions from its Mutual Evaluation Report (MER), a report based on peer reviews to provide an in-depth description and analysis of each country’s system for preventing criminal abuse of the financial system.

According to the watchdog, the country finalised a TF Risk Assessment, created an AML coordination committee and established a system to implement targeted financial sanctions without delay. Furthermore, it improved its ability to confiscate criminal proceeds and engage in international cooperation.

Recently, the country has updated its regulations to impose hefty fines and increased jail terms for money laundering offenders.

On March 9, the Dubai government announced a first-of-its-kind law to regulate virtual assets in line with an exponential increase in their demand. In a related development, Dubai Police’s cybercrime unit said it started monitoring cryptocurrencies to ensure that digital currencies are not being used for money laundering or other crimes.

How Can Financial Institutions Navigate this Tough Situation?

While new regulations can create a larger framework in the fight against financial crime, the onus is on financial institutions to put the regulations into action. They normally do this via regulatory compliance programmes, which include both human and technology resources.

Financial institutions in the Middle East are facing increasing pressure from local and global regulators to revamp their AML compliance programmes. Given the region’s rapidly evolving financial system and sophisticated criminal networks, it would be a complex task for them.

When it comes to AML compliance, financial institutions are often troubled by outdated compliance systems, scarcity of skilled compliance staff and inefficient allocation of staff. A shortfall in any of these areas might lead to enforcement actions including hefty fines.

With modern technologies such as artificial intelligence and machine learning at the forefront, compliance departments can address many of these issues effectively. With proper implementation, these technologies can bring in a paradigm shift in the way financial institutions approach financial crimes and compliance risk at large.

This is an area where machine learning-powered platforms like Tookitaki can add value. Our end-to-end AML/CFT analytics solution, the Anti-Money Laundering Suite (AMLS), can create next-generation compliance programmes, encompassing key processes such as transaction monitoring, AML screening and customer due diligence on a single platform.

The suite comprises our Transaction Monitoring, Dynamic Risk Review, Smart Screening and Case Management solutions under one roof for all your AML needs. AMLS achieves new levels of accuracy and speed by providing the industry’s only shared typology platform, allowing our clients to break through silos and benefit from the industry’s collective AML insights. Our coordinated, collaborative and innovative approach enables everyone to join forces in the fight against financial crime.

Digital banks and FinTechs across the globe are building agile and scalable compliance programmes using AMLS, making us a partner of choice. We are leading AML initiatives at some of the key digital banks in Asia, the U.S. and Europe.

 

Want to know how you can build a comprehensive AML compliance program? Speak to one of our experts today.

 

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Blogs
18 Jul 2025
6 min
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Australia’s AML Overhaul: What AUSTRAC’s New Rules Mean for Compliance Teams

AUSTRAC’s latest draft rules signal a defining moment for AML compliance in Australia.

With growing pressure to address regulatory gaps and align with global standards, AUSTRAC has released a second exposure draft of AML/CTF rules that could reshape how financial institutions approach compliance. These proposed updates are more than routine tweaks, they are part of a strategic pivot aimed at strengthening Australia’s financial crime defences following international scrutiny and domestic lapses.

Background: Why AUSTRAC Is Updating the Rules

AUSTRAC’s policy overhaul comes at a critical time for the Australian financial sector. After years of industry feedback, regulatory incidents, and repeated warnings from the Financial Action Task Force (FATF), Australia has faced growing pressure to modernise its AML/CTF framework. This pressure intensified after the Royal Commission findings and the high-profile Crown Resorts case, which exposed systemic failures in detecting and reporting suspicious transactions.

The second exposure draft released in July 2025 reflects AUSTRAC’s intent to close key compliance loopholes and bring the current system in line with global best practices. It expands on the earlier draft by incorporating industry consultation and focuses on more granular obligations for customer due diligence, ongoing monitoring, and sanctions screening. These changes aim to strengthen Australia’s position in the face of a rapidly evolving threat landscape driven by digital finance, cross-border transactions, and sophisticated laundering techniques.

What’s Changing: Key Highlights from the Exposure Draft Rules

The second exposure draft introduces several new requirements that directly impact how reporting entities manage risk and monitor customers:

1. Clarified PEP Obligations

The draft now defines a broader set of politically exposed persons (PEPs), including foreign and domestic roles, and mandates enhanced due diligence regardless of source of funds.

2. Expanded Ongoing Monitoring

Entities must now monitor customers continuously, not just at onboarding, using both transaction and behavioural data. This shift pushes compliance teams to move from static checks to dynamic, risk-based reviews.

3. Third-Party Reliance Rules

The draft clarifies when and how financial institutions can rely on third parties for KYC processes. This includes more specific provisions for responsibility and liability in case of failure.

4. Sanctions Screening Expectations

AUSTRAC has proposed more stringent guidelines for sanctions screening, especially around name-matching and periodic list updates. There is also an increased focus on ultimate beneficial ownership.

5. Obligations for Fintechs and Digital Wallet Providers

The draft recognises the role of digital services and imposes tighter onboarding and monitoring standards for high-risk products and cross-border offerings.

Comparing ED2 with Tranche 2 Reforms

While Tranche 2 reforms remain on the horizon with a broader mandate to include lawyers, accountants, and real estate agents under the AML/CTF regime, the second exposure draft zeroes in on tightening the compliance expectations for existing reporting entities.

Unlike Tranche 2, which aims to expand the scope of regulated professions, the exposure draft rules focus on strengthening operational practices such as ongoing monitoring, customer segmentation, and enhanced due diligence for existing covered sectors. The rules also go deeper into technological expectations, such as maintaining audit trails and validating third-party service providers.

In short, ED2 is more about modernising the how of AML compliance, whereas Tranche 2 will eventually reshape the who of the regulated ecosystem.

Why It Matters for Financial Institutions

For compliance officers and risk managers, these proposed changes translate to increased scrutiny, more granular documentation, and an urgent need to improve monitoring practices. Institutions will be expected to maintain stronger evidence trails, adopt real-time monitoring tools, and improve their ability to detect behavioural anomalies across customer life cycles.

Moreover, the clear emphasis on risk-based ongoing due diligence means firms can no longer rely on periodic checks alone. Dynamic updates to risk profiles, responsive escalation triggers, and cross-channel data analysis will become critical components of future-ready compliance programs.

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Tookitaki’s Perspective and Solution Fit

At Tookitaki, we believe AUSTRAC’s second exposure draft offers an opportunity for Australian institutions to build more resilient, intelligence-driven compliance programs.

Our flagship platform, FinCense, is built to adapt to evolving AML obligations through its scenario-driven detection engine, AI-led transaction monitoring, and federated learning capabilities. Financial institutions can seamlessly adopt continuous risk monitoring, generate audit-ready investigation trails, and integrate sanctions screening workflows, all while maintaining high levels of precision.

Importantly, Tookitaki’s federated intelligence model draws from a community of AML experts to anticipate emerging threats and codify new typologies. This ensures institutions stay ahead of bad actors who are constantly evolving their methods.

What’s Next: Preparing for the New Rules

AUSTRAC is expected to finalise the rules following this round of industry consultation, with phased implementation timelines to be announced. Financial institutions should begin by assessing gaps in their existing AML controls, especially around ongoing monitoring, PEP screening, and documentation processes.

This is also a good time to evaluate technology infrastructure. Solutions that enable scalable monitoring, natural language audit logs, and flexible rule design will give institutions a distinct advantage in meeting the new compliance bar.

Conclusion

AUSTRAC’s second exposure draft marks a pivotal shift from checkbox compliance to intelligent, risk-driven AML practices. For financial institutions, the future of compliance lies in adopting flexible, technology-powered solutions that can evolve with the regulatory landscape.

The message is clear, compliance is no longer a static requirement. It is a dynamic, strategic pillar that demands agility, insight, and collaboration.

Australia’s AML Overhaul: What AUSTRAC’s New Rules Mean for Compliance Teams
Blogs
16 Jul 2025
4 min
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Agentic AI Is Here: The Future of Financial Crime Compliance Is Smarter, Safer, and Audit-Ready

The financial crime compliance landscape is evolving rapidly, and so are the tools required to keep up.

As criminal tactics become more sophisticated and regulatory expectations more demanding, compliance teams need AI systems that do more than detect anomalies. They must explain their decisions, prove their accuracy, and demonstrate responsible governance at every step.

At Tookitaki, we are building an Agentic Framework - a network of intelligent agents which are auditable and explainable for each action they take. These agents don’t just make recommendations - they work across the entire compliance lifecycle, supporting real-time detection, guiding investigations, and reinforcing regulatory alignment.

This blog introduces Tookitaki’s agentic approach, grounded in collaborative intelligence and designed to help financial institutions take control, not just of detection accuracy, but of trust.

The Compliance Challenge: Accuracy Isn’t Enough

Traditional AI systems are built to optimise performance. But in regulated environments, performance is only half the story.

Regulators now expect AI systems to be:

  • Fully explainable and traceable
  • Free from hidden biases
  • Secure by design
  • Governed with clear human oversight

Frameworks like the Federal Reserve’s SR 11-7, MAS TRM, and GDPR are clear: If a system impacts a regulated decision, whether it’s flagging suspicious transactions, filing reports, or escalating investigations, then institutions must be able to validate, explain, and defend those outcomes.

This is where most AI platforms struggle.

Tookitaki’s Answer: A Trust Layer Powered by Agentic AI

Tookitaki’s platform is built to meet these challenges head-on. It combines two powerful engines:

  • The AFC Ecosystem: A global community of financial crime experts who contribute real-world scenarios forming the industry’s most robust collaborative intelligence network.
  • FinCense: Our end-to-end compliance platform, which integrates these scenarios into dynamic workflows powered by AI agents, all aligned with regulatory best practices.

Together, these components form Tookitaki’s Trust Layer for Financial Services — enabling financial institutions to reduce risk, improve compliance operations, and increase confidence across every investigation.

Built on Collaborative Intelligence, Tested in Your Environment

At the heart of Tookitaki’s approach is the AFC Ecosystem, a global community of compliance experts who contribute a growing library of real-world typologies spanning dozens of financial crime risk categories. These are not hypothetical constructs. They are tested, peer-reviewed patterns that reflect how financial crime plays out in practice from money mule networks to account take over and social engineering.

Instead of relying on static rules or black-box models, financial institutions using Tookitaki gain access to this dynamic intelligence. And before anything is deployed, scenarios can be tested against the institution’s own historical data using our Simulation Agent, giving teams complete control, visibility, and confidence in performance.

AI Agents That Power Compliance Intelligence

Tookitaki’s Agentic AI framework is built on specialised agents, each designed to improve efficiency, accuracy, and explainability across the investigation lifecycle:

  • Simulation Agent: Tests new detection scenarios against historical data, helping teams fine-tune thresholds and understand performance before going live.
  • Alert Prioritization Agent: Ranks alerts by risk relevance using a regulatory-weighted model, reducing false positives and enabling faster triage with over 94% alignment to expert decisions.
  • Smart Disposition Agent: It’s an agent that lets compliance teams codify their Standard Operating Procedures (SOPs) as advanced rules — so that eligible alerts are automatically closed without human intervention.
  • Smart Narration Agent: An agent powered by large language models that auto-generates a natural language narrative for each alert.
  • FinMate (Investigation Copilot): Assists investigators with case context, risk indicators, and typology insights, improving evidence collection and reducing handling time by over 60%.

These agents operate within Tookitaki’s compliance-native orchestration layer — ensuring every action is explainable, governed, and aligned with regulatory frameworks.

Setting a Benchmark in AI Governance

Tookitaki is proud to be the first RegTech company validated under Singapore’s national AI Verify programme, establishing a new standard for auditable, explainable, and responsible AI in compliance.

Our Agentic AI framework, specifically its AI-powered narration capabilities, underwent rigorous independent validation, which included:

  • Accuracy testing across 400+ real-world AML scenarios
  • Multi-language validation in complex cases involving English and Mandarin
  • Zero tolerance for hallucinations, with protocols ensuring all outputs are grounded in verifiable data
  • Compliance assurance, proving the system adheres to financial regulations and prevents misuse

This milestone reinforces Tookitaki’s position as a RegTech innovator that blends AI performance with governance - by incorporating guardrails to prevent AI hallucinations, ensuring that every narrative generated is accurate, auditable, and actionable - a critical requirement for financial institutions operating under increasing regulatory scrutiny.

A New Standard for AI in Compliance

Agentic AI is not about replacing human investigators — it’s about equipping them with the intelligence, speed, and context they need to work smarter.

By combining collaborative intelligence-driven detection, real-time simulation, and agentic automation, Tookitaki offers a future-ready model for the entire reg-tech lifecycle - one that’s grounded in transparency, is auditable and capable of learning with every new pattern, case, and risk.

In a world where compliance is no longer just about rules, but about resilience and trust, Tookitaki’s Agentic AI is setting a new standard.

What’s Next in This Blog Series

In the upcoming blogs, we’ll dive deeper into Tookitaki’s flagship AI agents — exploring how each one is designed, validated, and deployed in production environments to deliver compliance-grade performance.

Stay tuned.

Agentic AI Is Here: The Future of Financial Crime Compliance Is Smarter, Safer, and Audit-Ready
Blogs
19 Jun 2025
5 min
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Australia on Alert: Why Financial Crime Prevention Needs a Smarter Playbook

From traditional banks to rising fintechs, Australia's financial sector is under siege—not from market volatility, but from the surging tide of financial crime. In recent years, the country has become a hotspot for tech-enabled fraud and cross-border money laundering.

A surge in scams, evolving typologies, and increasingly sophisticated actors are pressuring institutions to confront a hard truth: the current playbook is outdated. With fraudsters exploiting digital platforms and faster payments, financial institutions must now pivot from reactive defences to real-time, intelligence-led prevention strategies.

The Australian government has stepped up through initiatives like the National Anti-Scam Centre and legislative reforms—but the real battleground lies inside financial institutions. Their ability to adapt fast, collaborate widely, and think smarter will define who stays ahead.

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The Evolving Threat Landscape

Australia’s shift to instant payments via the New Payments Platform (NPP) has revolutionised financial convenience. However, it's also reduced the window for detecting fraud to mere seconds—exposing institutions to high-velocity, low-footprint crime.

In 2024, Australians lost over AUD 2 billion to scams, according to the ACCC’s Scamwatch report:

  • Investment scams accounted for the largest losses at AUD 945 million
  • Remote access scams followed with AUD 106 million
  • Other high-loss categories included payment redirection and phishing scams

Behind many of these frauds are organised crime groups that exploit vulnerabilities in onboarding systems, mule account networks, and compliance delays. These syndicates operate internationally, often laundering funds through unsuspecting victims or digital assets.

Recent alerts from AUSTRAC and ASIC also highlighted the misuse of cryptocurrency exchanges, online gaming wallets, and e-commerce platforms in money laundering schemes. The message is clear: financial crime is mutating faster than most defences can adapt.

Australia FC

Why Traditional Defences Are Falling Short

Despite growing threats, many financial institutions still rely on legacy systems that were designed for a static risk environment. These tools:

  • Depend on manual rule updates, which can take weeks or months to deploy
  • Trigger false positives at scale, overwhelming compliance teams
  • Operate in silos, with no shared visibility across institutions

For instance, a suspicious pattern flagged at one bank may go entirely undetected at another—simply because they don’t share learnings. This fragmented model gives criminals a huge advantage, allowing them to exploit gaps in coverage and coordination.

The consequences aren’t just operational—they’re strategic. As financial criminals embrace automation, phishing kits, and AI-generated deepfakes, institutions using static tools are increasingly being outpaced.

The Cost of Inaction

The financial and reputational fallout from poor detection systems can be severe.

1. Consumer Trust Erosion

Australians are increasingly vocal about scam experiences. Victims often turn to social media or regulators after being defrauded—especially if they feel the bank was slow to react or dismissive of their case.

2. Regulatory Enforcement

AUSTRAC has made headlines with its tough stance on non-compliance. High-profile penalties against Crown Resorts, Star Entertainment, and non-bank remittance services show that even giants are not immune to scrutiny.

3. Market Reputation Risk

Investors and partners view AML and fraud management as core risk factors. A single failure can trigger media attention, customer churn, and long-term brand damage.

The bottom line? Institutions can no longer afford to treat compliance as a cost centre. It’s a driver of brand trust and operational resilience.

Rethinking AML and Fraud Prevention in Australia

As criminal innovation continues to escalate, the defence strategy must be proactive, intelligent, and collaborative. The foundations of this smarter approach include:

✅ AI-Powered Detection Systems

These systems move beyond rule-based alerts to analyse behavioural patterns in real-time. By learning from past frauds and adapting dynamically, AI models can flag suspicious activity before it becomes systemic.

For example:

  • Unusual login behaviour combined with high-value NPP transfers
  • Layered payments through multiple prepaid cards and wallets
  • Transactions just under the reporting threshold from new accounts

These patterns may look innocuous in isolation, but form high-risk signals when viewed in context.

✅ Federated Intelligence Sharing

Australia’s siloed infrastructure has long limited inter-institutional learning. A federated model enables institutions to share insights without exposing sensitive data—helping detect emerging scams faster.

Shared typologies, red flags, and network patterns allow compliance teams to benefit from collective intelligence rather than fighting crime alone.

✅ Human-in-the-Loop Collaboration

Technology is only part of the answer. AI tools must be designed to empower investigators, not replace them. When AI surfaces the right alerts, compliance professionals can:

  • Reduce time-to-investigation
  • Make informed, contextual decisions
  • Focus on complex cases with real impact

This fusion of human judgement and machine precision is key to staying agile and accurate.

A Smarter Playbook in Action: How Tookitaki Helps

At Tookitaki, we’ve built an ecosystem that reflects this smarter, modern approach.

FinCense is an AI-native platform designed for real-time detection across fraud and AML. It automates threshold tuning, uses network analytics to detect mule activity, and continuously evolves with new typologies.

The AFC Ecosystem is our collaborative network of compliance professionals and institutions who contribute real-world risk scenarios and emerging fraud patterns. These scenarios are curated, validated, and available out-of-the-box for immediate deployment in FinCense.

Some examples already relevant to Australian institutions include:

  • QR code-enabled scams using fake invoice payments
  • Micro-laundering via e-wallet top-ups and fast NPP withdrawals
  • Cross-border layering involving crypto exchanges and shell businesses

Together, FinCense and the AFC Ecosystem enable institutions to:

Building a Future-Ready Framework

The question is no longer if financial crime will strike—it’s how well prepared your institution is when it does.

To be future-ready, institutions must:

  • Break silos through collaborative platforms
  • Invest in continuous learning systems that evolve with threats
  • Equip teams with intelligent tools, not more manual work

Those who act now will not only improve operational resilience, but also lead in restoring public trust.

As the financial landscape transforms, so too must the compliance infrastructure. Tomorrow’s threats demand a shared response, built on intelligence, speed, and community-led innovation.

Strengthening AML Compliance Through Technology and Collaboration

Conclusion: Trust Is the New Currency

Australia is at a turning point. The cost of reactive, siloed compliance is too high—and criminals are already exploiting the lag.

It’s time to adopt a smarter playbook. One where technology, collaboration, and shared intelligence replace outdated controls.

At Tookitaki, we’re proud to build the Trust Layer for Financial Services—empowering banks and fintechs to:

  • Stop fraud before it escalates
  • Reduce false positives and compliance fatigue
  • Strengthen transparency and accountability

Through FinCense and the AFC Ecosystem, our mission is simple: enable smarter decisions, faster actions, and safer financial systems.

Australia on Alert: Why Financial Crime Prevention Needs a Smarter Playbook