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

The President of the Kuwait Association of Exchange Companies, Abdullah Al-Mulla, affirmed the sector’s commitment to enhancing the security of financial transactions 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 in an interview with 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 pivotal role in strengthening regulatory standards, good governance, and compliance practices across the sector. He pointed out their participation in the Aman Central Platform for processing reports of cyber fraud.

He clarified that the Association plays a supportive role by bringing member companies together, 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 undertaken by 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 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.

Al-Mulla noted that the 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 at the initiative of the Central Bank of Kuwait, by regularly reporting detected cyber threats and incidents through 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 Aman Central 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, national authorities, the Kuwait Banks Association, and the Kuwait Association of Exchange Companies to combat cyber threats and financial fraud, protect customers, and strengthen confidence in Kuwait’s financial system.

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 confirmed that most exchange companies possess extensive experience in services

Through a deep understanding of the diverse needs of their customer base and by adopting new technologies, money exchange companies can leverage this expertise to expand their digital channels, accelerate transactions, enhance transparency, and provide greater convenience and flexibility for customers. Al-Mulla added that money exchange companies will continue, under the supervision and guidance of the Central Bank of Kuwait, to adopt new technologies, maintain their competitiveness, improve customer services, and safeguard the security and integrity of the financial system.

He noted that narrow profit margins, rising operational costs, and wages pose obstacles to geographic expansion, including rental expenses and other administrative costs. He pointed out that pressure on profit margins is a factor that money exchange companies must consider when planning geographic expansion, noting 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 areas remains a commercial one, taken independently by each money exchange company based on market demand, customer needs in the relevant area, commercial viability, and applicable regulatory requirements. He emphasized 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 money exchange companies to reach a broader customer base without necessarily needing 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 money 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 money exchange companies boast 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, easier, and more 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 stressed that any such collaboration or technological development must comply with applicable regulatory requirements and directives of the Central Bank of Kuwait.

Regarding the impact of recent economic reforms and decisions in the country on the future of the money 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.

On the implications of the Law-Decree on Combating Commercial Concealment for the trajectory of the money 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 the true ownership of commercial activities and preventing their misuse. He clarified that the decree complements existing measures.

To combat money laundering and the financing of terrorism, particularly through due diligence procedures toward customers, verification of the beneficial owner, transaction monitoring, and reporting of suspicious transactions. He added that clear guidelines issued by the relevant authorities will contribute to ensuring 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 authorities, in order to protect customers, enhance trust, and preserve the integrity of Kuwait’s financial system.

Al-Mulla affirmed that the Union plays an important 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, exchange best practices, and address matters of shared interest, with each company remaining independently responsible for complying with the Central Bank of Kuwait’s instructions and the principles of fair competition.

He further stressed 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 added that the Union encourages its members to share practical experience and good 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 clarified 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 daily operations.