Month: July 2025

Saudi Arabia’s banking sector is advancing with vision and velocity, guided by the Saudi Central Bank (SAMA)’s evolving regulatory expectations and aligned with Vision 2030’s bold digital transformation. SAMA’s June 2025 directives make it clear that AI-driven scam detection, biometric onboarding, and cross-border surveillance are becoming essential.

 

Regulatory Imperatives: The 2025 Timeline

As fraud threats grow more complex, the second half of 2025 is becoming a defining phase in the Kingdom’s journey toward real-time, intelligence-led fraud prevention.

Q3 2025 Expectations

• AI Governance Enforcement: Banks are expected to demonstrate explainable, auditable GenAI systems with clearly documented bias controls and data lineage.
• GCC Mule Account Watchlist: SAMA and its GCC counterparts are strengthening cooperation against cross-border mule networks through joint fraud intelligence frameworks.
• Biometric KYC Controls: Real-time biometric verification is being strongly encouraged for mobile onboarding, with heightened regulatory scrutiny of facial spoofing controls.

Q4 2025 Shifts

• Open Banking Phase 3: This regulatory framework allows banks and authorized third parties to securely share customer data via standardized APIs, based on customer consent. Under Phase 3, institutions will be responsible for managing fraud risks related to third-party fintechs, with stronger monitoring and control measures.
• AI Audit Trail Requirements: SAMA is expected to finalize guidelines for auditability and traceability of AI decisions in high-risk use cases, especially at the AML/fraud intersection.
• Multi-Channel Orchestration: Banks must holistically monitor fraud journeys across Sarie (the national instant payment system), POS, mobile, IVR, and embedded finance ecosystems.

Emerging Threat Vectors & Technology Gaps Requiring Attention

SAMA’s 2025 fraud reviews identify three fast-rising risks:

• Arabic-language scam kits targeting SMEs and younger demographics with localized phishing
• Synthetic IDs using AI-fabricated data to bypass legacy KYC in fast-disbursal lending
• Social-driven mule recruitment through encrypted messaging platforms such as Telegram

Rules-based systems are no longer sufficient. Banks must pivot to:

• Behavioral AI for dynamic, real-time anomaly detection
• Federated learning for privacy-preserving, cross-institutional threat sharing
• Deepfake detection for media authentication in onboarding/voice transactions

Collaboration: The Non-Negotiable Priority

SAMA’s Counter-Fraud Framework expects banks to achieve at least Level 3 (Structured and Formalized) compliance maturity, requiring:

• Integration of fraud, cyber, and AML teams to break operational silos
• Active participation in GCC-wide anti-financial crime alert networks
• API-level fraud data sharing with Open Banking partners
  

With MENA cybersecurity spending projected to reach $3.3 billion by 2025, the focus must be on:

• Real-time behavioral analytics over batch fraud monitoring
• Demonstrably explainable AI, in line with SAMA’s evolving AI ethics framework
• Continuous authentication across embedded finance ecosystems

The coming months will shape Saudi Arabia’s long-term fraud resilience. Success depends not simply on reacting to threats, but on adopting intelligent, adaptive, and collaborative systems, elevating fraud prevention from a compliance mandate to a pillar of trust.

Read more about real-time fraud defense frameworks at Clari5 Banking Solutions Overview.

 

The Bangko Sentral ng Pilipinas (BSP) recently issued a circular requiring all banks and e-wallet providers in the Philippines to implement real-time, automated fraud management systems within a year. This marks a crucial moment for the country’s financial ecosystem, aligning regulation with the rapid growth in digital transactions and rising fraud risks.

Why Now?

The Philippines’ digital payments landscape has grown at an impressive pace in recent years:

• Over 43% year-on-year growth in digital payment transactions as of 2024
• Target of 50% of retail payments to be digital by 2026, already surpassed in 2023 at 52.8%
• A mobile-first consumer base and an expanding e-wallet ecosystem

However, this success has brought significant challenges. Digital fraud has surged:

• Online fraud incidents rose 85% year-on-year, based on recent reports
• The digital fraud rate hit 13.4% in 2024, nearly 150% higher than the global average
• E-wallet fraud is now the most common consumer complaint, with major providers frequently cited in reports
• Online scam complaints tripled in 2024, with over 10,000 cases reported to the Cybercrime Investigation and Coordinating Center (CICC)

This BSP directive is about more than compliance. It’s about rebuilding and reinforcing public trust in digital financial services — which is essential for sustaining growth.

What the Mandate Requires

The circular sets clear expectations for banks and e-wallet providers to deliver:

• Automated Fraud Monitoring: Continuous oversight to spot anomalies
• Real-Time Detection: Immediate identification of suspicious patterns
• Instant Blocking: The ability to stop fraudulent transactions before completion
• Integration with AML Systems: A unified approach to financial crime risk
• Continuous Customer Monitoring: For post-onboarding fraud detection and risk profiling
• Robust Consumer Education: Helping customers understand and avoid scams

These capabilities are essential for tackling increasingly sophisticated fraud, from account takeovers and synthetic identities to organised scam rings and mule networks.

A Continuum of Regulatory Progress

This mandate builds on other BSP and regional efforts to strengthen digital trust, including:

• Enhanced Transaction Authentication introduced in 2024
• QR Ph Person-to-Biller Expansion to promote seamless, cashless bill payments
• Upcoming AI-Specific Banking Regulations to ensure accountability in AI-driven fraud detection and AML analytics
• FATF Grey List Review & On-Site Evaluation, encouraging stronger KYC/AML standards and ongoing monitoring
• AFASA & IT Risk Amendments mandating real-time fraud monitoring and post-onboarding detection
• BCCR regulations enhancing oversight of fraud-related consumer complaints
• CASP Guidelines, relevant for those expanding into digital assets

Together, these measures reflect a maturing regulatory environment that balances innovation with accountability and consumer protection.

What Will It Take to Comply?

For banks and e-wallet providers, meeting the mandate will require a meaningful shift in capability:

• Enterprise-grade real-time decision engines to handle high transaction volumes
• Machine learning-powered behavioural analytics to detect fraud across diverse channels
• Cross-channel integration linking mobile apps, online banking, ATMs, e-wallets, and merchant platforms
• Tightly integrated AML and fraud risk systems for a unified view of financial crime risk
• Scalable architectures that can adapt to evolving regulatory demands

Institutions that see this as a strategic transformation, rather than a compliance checkbox, will be best placed to scale safely as the Philippines deepens its digital finance ambitions.

Beyond Compliance and the Cost of Inaction

Real-time fraud management is not just about ticking boxes. It is a strategic investment that helps banks and e-wallet providers:

• Build and maintain customer trust
• Reduce fraud losses
• Deliver better experiences with friction-right authentication
• Show leadership in safeguarding the digital financial system

Those who aim higher than minimum compliance will gain a competitive edge as consumer trust becomes the critical differentiator.

At the same time, delaying or underinvesting carries real costs—direct financial losses, reputational damage, and potential regulatory penalties. In a highly competitive market, those costs can quickly exceed the investment needed to modernise.

It is worth noting the Philippines isn’t alone in this push. Regulators across ASEAN, from Malaysia’s BNM to Indonesia’s OJK, are also lifting expectations around real-time fraud monitoring and AML integration. Institutions that act early can avoid fragmented, reactive upgrades later, and also set themselves apart as leaders in a region that prioritises safe, inclusive digital finance.

A Moment for Market-Wide Collaboration

This mandate is both urgent and necessary. It calls on Philippine financial institutions to take a proactive stance: rethinking their frameworks, modernising technology, and collaborating with experienced partners in real-time financial crime risk management.

In the coming months, we can expect further clarifications, industry discussions, and technology evaluations. Institutions that move early won’t just ensure compliance, they will strengthen their fraud defences and position themselves for long-term growth in a market where digital trust is the new currency of success.

Read more about real-time fraud defence frameworks at Clari5 Banking Solutions.