Exchange with confidence

 

 

The Foreign Exchange and Remittance Group (FERG) comprises of businesses engaged in money exchanging and remittance and was created as an initiative from the Central Bank of the UAE. FERG aims to bring diverse remittance and exchange companies to a common platform for mutual benefit. The group works to foster the development of an innovative yet stable foreign exchange and remittance industry that contributes to the economic and social wellbeing of its customers. Moreover, the group’s efforts are intended to position the UAE as a leading market in global exchange and remittance flows. In this exclusive interview, Rajiv Raipancholia, Secretary, FERG talks about foreign exchange and remittance in the UAE and the latest trends in Anti Money Laundering.

 

 

How competitive is the exchange industry in the UAE?

With the UAE currently being one of the most favorite tourist destinations and with the expatriate population requirement to transfer funds to their home country, exchange houses plays an extremely vital role to provide financial services. There are over one thousand retail branches across the seven emirates with Dubai having most of the retail outlets followed by Abu Dhabi and Sharjah. With an exchange house available on every street, healthy competition exists in the interest of the consumer. Compared to other countries across the globe, the transaction fee for money transfer is the lowest in UAE with US Dollar, Euro, Great British Pound and Saudi Riyal being the most exchanged currencies.

 

How is FERG developing the exchange and remittance industry?

Exchange houses offering one-stop shop financial products are acknowledged as basic need of the consumers and one of the essential industries in the UAE. FERG ensures all their members understand the necessity of implementing robust Anti Money Laundering policies. FERG is consistently working closely with the regulators of many countries in order to understand the new additions and changes in regulations in their respective countries and shares the details with the exchange houses, which in turn implement high standards and effective practices. FERG is continuously organizing AML trainings besides other topics. Moreover, Dubai Police has agreed to train FERG registered exchange companies’ staff members with an emphasis on topics such as counterfeit notes, identifying criminal behavior, mitigating and reducing the risk.  At all times, FERG is working towards raising the standards of the industry.

 

What are the main challenges of the remittance market?

Compliance is a key challenge. Exchange companies should implement AML policies of international standards, take proper KYC documents for remittances and conduct Enhances Due Diligence wherever it is required. Besides real time screening of the remitter / beneficiary and verifying the obtained details, one should identify unusual behavior and patterns in money transfer and implement risk-based approach. Remittance transactions are routed through various correspondence banks. Banks need to be convinced that exchange companies are following proper AML policies and procedures.

 

In line with the recent Anti Money Laundering conference that you organized, what are the latest AML measures adopted in this industry?

The aim of the conference was to share the updates on AML measures and highlight new risks and fraudulent methods applied by fraudsters targeting our industry globally. Exchange houses need to follow a risk-based approach while conducting transactions. They must also deploy compliance-vested software to monitor payments routed through their system. In addition, systems should be geared to flag unusual transactions.

The conference stressed on the importance of vigilance, staff training and regular auditing to discover irregularities.

 

 

What were the highlights of this conference?

A better dialogue is required between banks and exchange houses. It is important to have strict compliance procedures to combat money laundering. All transactions need to be screened on a real-time basis. Banks should be present at future conferences in order to demonstrate the policies implemented by FERG members and the importance given to KYC and AML compliance.

 

How do you plan to move this industry forward?

FERG’s focus for the year will be more towards AML training. The compliance world is changing at a very fast pace and to be updated with the changes, we will have to do more trainings. Our association with Dubai Police will also improve staff awareness when it comes to criminal activity.   

 

 

 

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