The Double-Edge Sword of Technology in Facilitating and Fighting Against Fraud and Money Laundering: A critical comparative analysis of the effectiveness of Saudi Arabia and the UK efforts in addressing technology-based financial crimes

Abstract

There is a distinct association between technology and financial crime, whether technology facilitates the act or is used to detect and mitigate its effects. This paper highlights this relationship in detail. It defines technology-based financial crimes, identifies the risks associated with them and uses case studies to describe these risks in detail. Technologies for fighting financial crimes are also highlighted, including financial technologies (FinTech) and regulatory technologies (RegTech). The role of artificial intelligence (AI) and machine learning (ML) in regulating these crimes is discussed, including the identification and prediction of consumer behaviour, the analysis of unstructured data, the reporting of suspicious activities and the improvement of compliance. The role of blockchain as a distributed ledger technology (DLT) in regulating and preventing fraud is also analysed. The paper focuses on the impact of technology on financial crimes in the Kingdom of Saudi Arabia (KSA), especially internet fraud and money laundering. Saudi Arabian legislation to combat financial crimes is discussed, including anti-money laundering (AML) legislation and the implementation of the Financial Action Task Force and Anti-Financial Fraud and Deceit Law. The effectiveness of these laws is also reviewed. To gain a more global and comprehensive view of the effects of technology on financial crime, measures in the United Kingdom (UK) and Saudi Arabia for combating financial crimes are also addressed; the paper analyses the major differences and similarities between the countries’ financial regulatory authorities and their implementation of technology against financial crimes. Lastly, the most crucial challenges of the anti-financial crimes (AFCs) system are identified along with recommendations for global measures to mitigate the expanding risk of financial crimes.