Muhammad Shabbir Uddin Malick: "Balancing Compliance and Customer Experience is Key to Fighting Fraud”
On this page
Table of contents
Muhammad Shabbir Uddin Malick is an experienced compliance professional specializing in Anti-Money Laundering (AML) and fraud prevention, with a focus on the unique challenges faced by currency exchange houses. As the driving force behind Meezan Exchange’s robust compliance framework, he combines strategic insight with hands-on expertise to address complex issues such as identity fraud, regulatory compliance, and customer experience.
In his role, Malick has championed the implementation of advanced measures, including biometric verification and real-time transaction monitoring, to safeguard against fraud and ensure alignment with both national and international regulations. He emphasizes that "balancing compliance with a seamless user experience is not just a regulatory necessity but also a strategic imperative for long-term success" in the financial services industry.
In this interview, Malick provides a candid perspective on how technology, corporate culture, and forward-looking strategies can redefine fraud prevention and AML compliance in the evolving landscape of currency exchange. His approach underscores a commitment to transparency, ethical practices, and continuous adaptation to emerging trends and threats.
Question: Are currency exchange companies more attractive to scammers than other types of industries?
Answer: Yes, scammers might target currency exchange by offering really attractive rates to trick people during transactions.
Q: What specific challenges does a currency exchange house like Meezan Exchange face in terms of fraud prevention and anti-money laundering compared to a traditional bank?
A: Due to their smaller size and limited resources, they often lack cultured compliance systems and dedicated teams for risk management. Their high volume of low-value transactions makes it difficult to monitor for suspicious activity effectively. However, advancements in technology present opportunities for these exchange houses to improve their fraud detection and operational accuracy, potentially enhancing their overall risk management capabilities in the future.
Q: Identity fraud (identity theft, use of false documentation) is trending. How do you act against these crimes? What is your policy when a suspicious case appears?
A: To combat identity fraud, we have implemented strict policies that include biometric verification and the requirement for customers to present original ID cards for all transactions. This multi-layered approach ensures that we accurately verify each individual's identity, making it extremely difficult for identity fraud to occur within our system. In suspicious cases, we escalate the issue for further investigation, verifying documentation and reporting to authorities as needed.
Q: KYC (Know Your Customer) strategies are your allies in these cases, I understand. What specific measures do you have implemented to properly verify your customers' identities and prevent fraud?
A: We have implemented strong KYC measures to verify customer identities and prevent fraud. This includes biometric verification, requiring original ID documents, and conducting risk assessments based on transaction patterns. We also monitor real-time transactions for unusual activity, allowing us to respond quickly to any suspicious behavior. These measures enhance our security and fraud prevention efforts.
Q: What is your process for verifying if a customer appears on sanctions lists, PEPs, or other watchlists? What do you do if there is a match?
A: We have a real-time screening process in place to verify customers against all applicable local and global watchlists, ensuring regular updates. This helps us identify and mitigate risks effectively. If a relationship is identified with an existing or potential customer, or an occasional customer, we promptly take the following actions:
Immediately freeze the funds or assets associated with that relationship, including:
- Funds or assets wholly or jointly owned or controlled either directly or indirectly
- Funds or assets derived from those owned or controlled
- Funds or assets belonging to individuals or entities acting on behalf of, or under the direction.
Q: How do you ensure compliance with all national and international anti-money laundering (AML) regulations?
A: To ensure compliance with all national and international anti-money laundering (AML) regulations, we implement a comprehensive AML compliance program. This program begins with regular risk assessments to identify and mitigate potential AML risks associated with our business activities and geographic exposure. We develop clear AML/CFT (Counter Financing of Terrorism) policies and procedures that align with relevant regulations and best practices.
Q: All these regulations are constantly changing. How often do you review your processes to stay up-to-date with regulatory changes and potential threats?
A: We conduct comprehensive reviews of our AML processes at least annually, but we also monitor regulatory changes continuously throughout the year. This involves staying informed about updates from regulatory bodies, industry developments, and emerging threats.
Q: Technology plays a fundamental role in the fight against fraud. Do you use KYC and AML services to comply with regulations? Do you work with any external providers?
A: We do not currently use external KYC and AML services. Instead, we have developed our own in-house processes and systems to comply with regulations.
Q: We have seen some cases of fraud, such as TD Bank in Canada, where some employees helped criminals. How important is it to have a corporate culture against fraud?
A: We prioritize maintaining a strong corporate culture against fraud by providing up-to-date training sessions for all employees. These sessions cover the latest fraud trends, regulatory requirements, and the importance of ethical behavior in the workplace. We also emphasize the consequences of fraudulent actions, clearly outlining the penalties for any offenses, which may include disciplinary action, termination, and potential legal repercussions.
Q: We have talked a lot about regulations, processes, etc. But how important is it to balance being compliant and providing a good user experience?
A: Balancing compliance with a positive user experience is essential for long-term success. We aim to integrate compliance processes seamlessly into the user journey, streamlining KYC and AML checks to facilitate quick completion while still meeting regulatory requirements.
Q: Looking ahead, what are the main trends or regulatory changes in KYC/AML that you foresee will impact the currency exchange sector? How are you preparing for them?
A: Looking ahead, key trends in KYC and AML that will impact the currency exchange sector include enhanced due diligence for high-risk customers, evolving regulations around digital currencies, and increased transparency requirements for beneficial ownership. To prepare, we are investing in advanced compliance technologies, such as AI-driven transaction monitoring, and enhancing our training programs. We’re also engaging with industry groups to stay informed on best practices and regulatory developments, ensuring we can adapt swiftly and maintain robust compliance.
Didit News
Muhammad Shabbir Uddin Malick: "Balancing Compliance and Customer Experience is Key to Fighting Fraud”
