Exchange Association: Combating Commercial Concealment Completes AML and Terror Financing Measures

Abdullah Al-Mulla, President of the Kuwait Foreign Exchange Companies Union, affirmed the sector’s commitment to enhancing the security of financial transactions and combating cyber fraud, noting its cooperation with the Central Bank of Kuwait and relevant authorities to counter cyber threats, protect customers, and bolster confidence in Kuwait’s financial system.

Speaking in an interview with the Kuwait News Agency (KUNA) on Thursday, Al-Mulla stated that foreign exchange companies operate under the close and continuous supervision of the Central Bank of Kuwait, which plays a vital role in strengthening regulatory standards, good governance, and compliance practices across the sector. He highlighted their participation in the Aman Central Platform for processing reports of cyber fraud.

He explained that the Union plays a supportive role by bringing together member companies, facilitating communication with relevant authorities, and providing a platform to discuss regulatory developments and shared challenges facing the sector.

Al-Mulla praised the proactive efforts of the Central Bank and national authorities to enhance regulatory standards, particularly in the areas of combating money laundering, terrorist financing, and the financing of weapons of mass proliferation. He emphasized that continued cooperation between official bodies and the private sector contributes to building a stronger, more transparent, and competitive foreign exchange sector in Kuwait.

He commended the leadership role of the Central Bank of Kuwait, its constructive initiatives, and its ongoing collaboration with national authorities in strengthening the financial sector, safeguarding the stability and integrity of Kuwait’s financial system.

He noted that the primary focus of foreign exchange companies remains on adopting digital technologies, investing in professional expertise, and enhancing monitoring systems to effectively address these challenges, meet evolving customer expectations, and protect their interests while ensuring the continued provision of safe, efficient, and reliable financial services.

Regarding cyber threats and sophisticated fraud, Al-Mulla said that foreign exchange companies work closely with the Cyber and Operational Resilience Task Force, established by the Central Bank of Kuwait, by regularly reporting detected cyber threats and incidents through a dedicated communication channel.

He added that foreign exchange companies are working to comply with the requirements of the Cyber and Operational Resilience Framework issued by the Central Bank of Kuwait on December 3, 2025, which enhances their capacity to prevent, respond to, and recover from emerging cyber threats.

Al-Mulla stated that the emergence of alternative payment technologies presents a challenge for companies, as it changes how customers transfer money and access financial services. Although these developments introduce new competition, they also provide opportunities for companies to modernize their services and respond to changing customer expectations.

He affirmed that most foreign exchange companies possess extensive experience in remittance services and a deep understanding of their diverse customer base. By adopting new technologies, they can leverage this expertise to expand their digital channels, accelerate transactions, enhance transparency, and offer greater convenience and flexibility to customers.

He considered narrow profit margins, rising operational costs, and wages as obstacles to geographic expansion, including rental expenses and other administrative costs.

He noted that the sector continues to explore opportunities to improve operational efficiency through digital services, optimal use of technology, employee development, and effective resource management. Furthermore, the expansion of digital services allows foreign exchange companies to reach a broader customer base without necessarily opening additional physical branches.

He clarified that these efforts can help companies manage costs while maintaining service quality, regulatory compliance, and fair competition.

Regarding market competition, Al-Mulla stated that the relationship between exchange companies and fintech firms combines competition with collaboration opportunities, as both sectors possess different strengths and capabilities that contribute to the development of the financial market.

He explained that fintech companies offer technological innovation and digital expertise, while exchange companies boast extensive experience in remittance services, established customer relationships, and an existing operational infrastructure.

Al-Mulla noted that rather than viewing fintech developments solely as a competitive challenge, companies can benefit from adopting new technologies and exploring appropriate partnerships that enhance customer experience and improve operational efficiency. He emphasized that any such collaboration or technological development must comply with applicable regulatory requirements and directives of the Central Bank of Kuwait.

On the impact of recent economic reforms and decisions in the country on the future of the exchange sector, Al-Mulla said the Union views these economic reforms and recent regulatory developments as positive steps toward strengthening Kuwait’s financial sector, reinforcing transparency, digital transformation, and good governance, while providing new opportunities for growth.

Regarding the implications of the decree-law on combating commercial concealment on the trajectory of the exchange sector, Al-Mulla stated that the decree represents an important step toward enhancing transparency, accountability, and fair competition in Kuwait’s business environment by addressing the concealment of beneficial ownership of commercial activities and preventing their misuse.

He clarified that the decree complements existing measures to combat money laundering and terrorist financing, particularly customer due diligence procedures, verification of beneficial owners, transaction monitoring, and reporting of suspicious transactions.

He added that clear guidelines issued by relevant authorities will help ensure consistent implementation of any additional requirements, reaffirming the Union’s support for these initiatives and its continued cooperation with the Central Bank of Kuwait and relevant national authorities to achieve customer protection, enhance trust, and maintain the integrity of Kuwait’s financial system.

Al-Mulla emphasized that the Union plays a vital role in bringing together member exchange companies and maintaining an open channel of communication with the Central Bank of Kuwait, while also providing a common platform for members to discuss sector challenges, exchange best practices, and address issues of mutual interest, with each company remaining independently responsible for complying with the Central Bank of Kuwait’s directives and principles of fair competition.