Exchange Companies Union: Strengthening Financial Transaction Security and Combating Cyber Fraud to Protect Customers - Sarmad

Kuwait Foreign Exchange Companies Association President Abdullah Al-Mulla affirmed the sector’s commitment to enhancing financial transaction security and combating cyber fraud, highlighting 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 to the Kuwait News Agency (KUNA) on Thursday, Al-Mulla noted that 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 pointed out their participation in the central “Aman” platform for processing reports of cyber fraud.

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

Al-Mulla praised the proactive efforts of the Central Bank and relevant 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 relevant national authorities to strengthen the financial sector, safeguard the stability and integrity of Kuwait’s financial system.

Al-Mulla noted that the foreign exchange sector faces several challenges, including the rapid evolution of digital payment technologies, changing customer expectations, rising operational costs, and the need for continuous enhancement of compliance and cybersecurity controls.

He stated that the primary focus of exchange companies remains on adopting digital technologies, investing in professional expertise, and strengthening 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 exchange companies work closely with the Cyber and Operational Resilience Task Force established by the Central Bank of Kuwait, through periodic reporting of detected cyber threats and incidents via a dedicated communication channel.

He added that exchange companies are working to meet 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.

On the issue of cyber fraud, Al-Mulla mentioned that exchange companies recently participated in the central “Aman” platform for processing cyber fraud reports, facilitating timely coordination between financial institutions and relevant authorities.

He noted that the Association played an active role in coordinating with the Kuwait Banks Association and facilitating the participation of member companies in the platform.

He affirmed that these joint efforts reflect the commitment of the Central Bank of Kuwait, relevant national authorities, the Kuwait Banks Association, and the Kuwait Foreign Exchange Companies Association to combating cyber threats and financial fraud, protecting customers, and enhancing confidence in Kuwait’s financial system.

Al-Mulla said 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 companies with opportunities to update their services and respond to changing customer expectations.

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

Al-Mulla added that exchange companies will continue, under the supervision and guidance of the Central Bank of Kuwait, to adopt new technologies, maintain their competitiveness, and improve customer services, while safeguarding the security and integrity of the financial system.

He noted that narrow profit margins and rising operational costs and wages pose obstacles to geographical expansion, including rent expenses and other administrative costs.

He pointed out that pressure on profit margins is a factor that exchange companies must consider when planning geographical expansion, explaining that the impact of these costs varies from one company to another depending on their business model, operational efficiency, and customer base.

Al-Mulla stated that the decision to open new branches or expand into different regions remains a business decision made independently by each exchange company, based on market demand, customer needs in the relevant area, commercial viability, and applicable regulatory requirements.

He indicated 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 exchange companies to reach a broader customer base without necessarily having to open 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 said that the relationship between exchange companies and fintech firms combines both competition and 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 have extensive experience in remittance services, established customer relationships, and existing operational infrastructure.

He added that combining these advantages enables both sectors to explore opportunities for developing new services, expanding reach, and providing faster, more convenient, and efficient payment solutions for customers.

Al-Mulla noted that instead of 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 from 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 that the Union views recent economic reforms and regulatory developments as positive steps toward strengthening Kuwait’s financial sector, consolidating transparency, digital transformation, and good governance, while providing new opportunities for growth.

He added that the successful implementation of these reforms requires continued cooperation between regulatory authorities and the sector, supported by investment in technology, professional competencies, and effective compliance systems.

Regarding the impact of the decree-law on combating commercial concealment on the trajectory of the exchange sector, Al-Mulla stated that the decree represents a significant step toward enhancing transparency, accountability, and fair competition in Kuwait’s business environment by addressing the concealment of the true 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 the relevant authorities will help ensure consistent implementation of any additional requirements, emphasizing the Union’s support for these initiatives and its continued cooperation with the Central Bank of Kuwait and relevant national bodies to protect customers, bolster confidence, and preserve the integrity of Kuwait’s financial system.

Al-Mulla stressed that the Union plays a vital role in bringing together its 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, share best practices, and address matters of mutual interest, with each company remaining independently responsible for complying with the Central Bank of Kuwait’s directives and principles of fair competition.

He further affirmed that the Union’s strength lies in unifying the sector’s efforts, while respecting each member company’s freedom to make its own decisions and manage its daily operations.

He noted that the Union encourages its members to exchange practical experience and best practices, particularly in the areas of regulatory compliance and prevention of financial crimes, in line with the Central Bank of Kuwait’s guidelines.

Al-Mulla explained that these collective efforts help exchange companies keep pace with evolving regulatory requirements, while each member remains individually responsible for fulfilling its compliance obligations and managing its day-to-day operations.