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Renowned for its modern infrastructure and dazzling architecture, the United Arab Emirates (UAE) is an international trade and transport hub that has undergone rapid development and economic growth since its federation just over 50 years ago.
Financial services firms based in the UAE need to be able to benchmark themselves against competitor organizations, and their staff in relation to their peers, in the area of employee compliance.
As Star continues its expansion in the region, in Q3 2023 we commissioned independent researchers to conduct a survey of compliance professionals based in the UAE to allow us to gain deeper insights into the employee compliance landscape of the Emirates; uncover professionals’ most significant pain points; ascertain the types of software solutions financial institutions are currently using to manage their compliance needs; and understand which factors are most likely to influence the selection of compliance software solutions.
Key Findings: Survey Highlights
- 90% of respondents cover multiple areas of compliance
- 38% of firms surveyed still rely on manual compliance processes
- 26% of respondents do not have access to a third-party compliance software solution
- 16% of firms are currently using AI tools for compliance monitoring
- 40% of firms struggle to build compliance infrastructure to comply with new regulations
As a major financial hub, the UAE is a regional base for many multinational companies, the employees of which are increasingly required to comply with numerous regulations, such as the newly introduced individual accountability regimes that have come into force worldwide. Although the UAE has not yet implemented its own individual accountability regime, it has an opportunity to set the standard and become the regional benchmark in employee compliance.
What Our Survey Revealed
Do firms build, buy, or build AND buy compliance solutions?
Almost three-quarters of survey respondents (73%) confirmed that they were already using a vendor software solution to manage compliance-related processes and issues. With nearly half (48%) using software built in-house and 38% still relying on manual processes, there is a degree of overlap: almost one in five (19%) said they used a combination of vendor and proprietary software.
What compliance challenges do they face?
Some 40% of respondents stated that they struggle to build compliance infrastructure to comply with new regulations. They also cited the volume of false positives respondents are required to manage and sort through (31% of respondents), the lack of automation in compliance processes (27%), and insufficient compliance resources (25%) among the challenges they face.
What are the compliance areas of greatest interest and concern?
The area of compliance most survey respondents said they were interested in is training and competency (67%). Monitoring, maintaining, and improving the training and competency of a firm’s employees underpins every process, policy, and regulation that employees and firms need to conform to. Almost half of all respondents (48%) were also interested in employee conflicts of interest.
The compliance area of greatest concern to respondents is personal account dealing, which was identified by 73%. This was followed by insider trading detection, gifts and hospitality, and outside business activities (each selected by 67% of respondents). All of these concerns can be addressed with rules-based, automated compliance software solutions.
Interest in whistleblowing (42%) may reflect a need for better reporting mechanisms, and improved incident and case management, following the implementation of whistleblowing regulations in jurisdictions such as the US and EU.
Which (compliance) software solution are firms using?
The overwhelming majority of respondents (81%) stated their firms were already using a compliance software solution. However, of the wide range of solutions they listed, most are not designed specifically for employee compliance, which is likely a contributing factor in the challenges respondents indicated they were experiencing, such as when building a more robust compliance infrastructure to comply with new regulations.
What are the key factors firms consider when purchasing an employee compliance solution?
For compliance professionals in the UAE, data security (87%), ease of use (77%), seamless integration with existing tools (71%), and reporting capabilities (71%), are among the most important factors when considering a compliance solution.
An Opportunity to Become the Regional Benchmark in Employee Compliance Software
By adopting user-friendly third-party compliance software solutions that integrate seamlessly with existing systems, financial services firms in the UAE have the opportunity to introduce greater automation.
This will allow them to increase efficiency, alleviate the burden on compliance teams so they can focus on high-value activities, and deliver training that meets the competency needs of employees. Crucially, it will enable the UAE to seize the opportunity to raise the bar and set the standard as the regional benchmark for employee compliance software.
To see the full results of our UAE market study and for an in-depth analysis, download our survey report. To learn about the key factors to consider before deciding whether to build, buy or build and buy your employee compliance software solution, download our ebook.
