Kuwaiti banks are strengthening their monitoring processes to detect numerous transactions and cash deposit transactions below the conventional limits of KD 3,000.
The revised supervisory process imposed by the Central Bank of Kuwait (CBK) aims to identify the splitting of transactions, or structuring, of large amounts of money into smaller parts. The approach is a method commonly used to beat law enforcement.
Unlike the previous regulatory compliance that was limited to one cash deposit or transfers over KD 3,000, such transactions were monitored and regulated by authorities, but many mal-intenders were found to break down transactions into smaller bits that would evade the system.
According to the new compliance regulations, local banks are expected to look for altered transactional tendencies, or the number of deposits made, total value over a period of time, and a general scenario of customers’ transactional behavior.
‘This is not about automatically flagging or constraining normal transactions’, say banking and compliance professionals.
‘Basic salary receipts, business income, family remittances and other normal business activity will all be processed as normal and our systems will be calibrated to identify what is normal, organic behavior compared to anything which raises suspicion.
Financial institutions have also been deploying advanced analytics, including artificial intelligence, in this area of high-volume daily data reviewing’.
The evolving regulatory landscape merely highlights Kuwait’s sustained efforts to find ways to integrate its financial environment with global anti-money laundering and counter-terrorist financing standards.
Regulators are looking to plug the possible grey areas for compliance created by the fragmentation of small cash flows while simultaneously protecting the banking sector, improving financial transparency, and monitoring all channels of digital and cash transactions.
