Inside MENA’s Fintech Future: AI, Fraud Prevention, & Regulatory Challenges
On September 26th, Dubai played host to a thought-provoking morning, where Sumsub and the MENA Fintech Association tackled one of the region’s biggest challenges: Fraud Prevention and Regulation. Hosted by Sumsub and the MENA Fintech Association, the event brought together thought leaders to dive into the evolving role of AI in fraud prevention. They explored how compliance and regulatory frameworks need to adapt to these changes.
AI & Fraud Prevention: A Balanced Approach
The morning began with an insightful metaphor: AI in fraud prevention is like the cockpit of an airplane. AI provides the speed and efficiency needed to navigate fraud risks quickly. But just like a pilot in a cockpit, human oversight is essential. This combination ensures accuracy and trust.
Tony Petrov, CLO at Sumsub and Co-Chair of the MFTA Policy & Regulations Working Group highlighted the importance of this balance. He said,
“AI can catch what we might miss, but without human judgement, it’s incomplete.”
Sumsub uses AI for initial fraud checks. However, humans are always involved in the final review. This hybrid approach is especially crucial in areas like Know Your Customer (KYC). The tech handles the heavy lifting, while humans make the final call.
The Tug-of-War Between Innovation & Regulation
One of the most pressing challenges is the gap between fintech innovation and regulatory adaptation. The industry is moving fast, while regulation struggles to keep up.
“Innovation races ahead, and regulation tries to catch up.”
-Safar-Aly, Counsel, Financial Regulation, Compliance & Investigations (MENA-wide), & Co-Chair of the MFTA Policy & Regulations Working Group
For fintechs, this means constantly navigating uncertain waters. The session emphasized the need for real-time information sharing to bridge this gap.
Participants discussed how frameworks like Mutual Legal Assistance Treaties (MLATs) can help tackle cross-border fraud. These treaties provide a legal pathway for countries to share information. However, they’re only part of the solution. Information sharing within the region is just as important. MENA countries need a unified approach to stay one step ahead of fraudsters.
Transparency & Ethics: Building Trust in AI
While AI offers exciting possibilities, it also raises ethical questions. For AI to be truly effective in fraud prevention, transparency is key. The term “explainable AI” came up repeatedly. AI systems must make decisions that are understandable to humans. Without this, users and regulators can’t trust the technology. The event highlighted UAE regulations like DIFC’s Reg 10, which govern AI’s autonomous processes. Such regulations are steps toward responsible AI usage in fintech.
The speakers stressed the need for high-quality data in AI systems. Good data ensures that AI applications are not only effective but also ethical. If AI makes a decision, we need to know why it made that choice. By ensuring AI is explainable, the industry can foster trust among users and regulators alike.
A Call for Collaboration
One of the recurring themes of the session was collaboration. Fraud prevention isn’t just a job for fintechs. It requires a joint effort between private institutions, regulators, and government agencies. Attendees discussed the importance of education and training—especially for regulators and compliance officers. They need a solid understanding of AI and blockchain technology to regulate effectively.
By working together, the industry can address gaps in knowledge and regulation. The session made it clear that a unified approach is the most effective way to combat fraud. More education, more sharing, and more alignment are needed to stay ahead of evolving threats.
Moving Forward: The Human Element in AI
As the session drew to a close, one message was clear. AI is a tool, but it will never replace human judgment. Fraud prevention in MENA’s fintech sector will rely on this balanced approach. By integrating AI with human oversight, the industry can enhance both speed and accuracy in fraud detection.
Looking ahead, the focus will be on developing transparent regulatory frameworks. It’s about ensuring that AI and data-driven solutions work within ethical boundaries. The conversation underscored the importance of ongoing dialogue between the public and private sectors. The MENA Fintech Association and Sumsub are committed to keeping these discussions alive, ensuring that innovation doesn’t come at the expense of security.
Missed the event? Keep an eye on future sessions from MENA Fintech Association. As the industry evolves, these conversations will play a vital role in shaping the future of financial security in the region.
Our esteemed panel of speakers & moderators consisted of:
- Toms Pauders, Managing Director and Co-Founder of ACX International
- 🚀 Giedrius Arbaciauskas, Transaction Monitoring Technical Manager, Sumsub
- Tony Petrov, CLO at Sumsub and Co-Chair of MFTA Policy & Regulations
- Samir Safar-Aly Counsel, Financial Regulation, Compliance & Investigations (MENA-wide), Co-Chair MFTA Policy & Regulations and AI Lead at Baker McKenzie
- Ilya Brovin, CGO at Sumsub
Nameer Khan, Chairman MENA FINTECH ASSOCIATION & Founder of Fils
