UAE Bank Body Warns Of Growing Fraud Risk As Digital Payments Soar

With the UAE's digital payments market on track to soar to $80.37 billion by 2025, residents are increasingly vulnerable to financial fraud, particularly during festive seasons, according to banking authorities.

The UAE Banks Federation (UBF) has issued a strong warning, emphasising the urgent need for heightened awareness among consumers to safeguard their finances.

Jamal Saleh, director general of UBF, highlighted the importance of vigilance as digital transactions surge during Eid Al Fitr and other holidays.“The banking sector is dedicated to providing a secure and seamless banking experience through advanced technologies,” Saleh said.“However, we cannot underestimate the importance of customer awareness as the first line of defense against fraud.” He urged the public to adopt precautionary measures and stay informed about safe digital banking practices.

Recent data reveals a concerning reality. A study by the UAE Cybersecurity Council and Trends Research and Advisory found that 65 per cent of UAE residents feel confident in their ability to detect fraud. Yet, financial scammers continuously adapt their strategies, creating an alarming landscape where 56 per cent of residents report experiencing at least one fraud attempt every month. Credit cards and bank transfers are among the most targeted payment methods, highlighting the urgent need for consumer education.

According to Statista, the total transaction value in the UAE digital payments market is projected to reach $80.37 billion in 2025, with a compound annual growth rate (CAGR) of 13.81 per cent expected to reach $134.84 billion by 2029. This growth is driven by the increasing adoption of e-commerce, mobile payments, and contactless payments.

In response to the growing threat, UBF has ramped up initiatives to combat financial crimes through the National Fraud Awareness Campaign, launched in 2020. This campaign plays a pivotal role in educating customers about potential risks and equipping them with knowledge to protect their finances.“Our successes in fraud detection and mitigation stem from our commitment to harnessing advanced technologies like artificial intelligence, machine learning, and biometric verification,” Saleh noted. The UBF has also developed a joint fraud monitoring platform that facilitates real-time data sharing among banks to combat fraudulent activities collaboratively.

The UAE's rapid digital transformation is a double-edged sword, experts said. While it enhances convenience and efficiency in transactions, it also opens new avenues for fraud. The proliferation of digital wallets and mobile payment apps - such as PayPal, Venmo, and local alternatives - has made transactions easier but has also attracted the attention of cybercriminals. The rise of fintech startups and the integration of blockchain technology into payment systems further contribute to this expanding digital landscape, emphasising the need for robust security measures.

Several factors are propelling the growth of the digital payments market. The convenience and speed of digital transactions have become increasingly appealing, particularly to younger consumers. Additionally, the digitization of businesses has heightened the demand for payment solutions that streamline operations and reduce costs. The explosion of e-commerce and online marketplaces has underscored the necessity for secure payment systems that can facilitate cross-border transactions. Moreover, the Covid-19 pandemic has accelerated the trend toward contactless payments as both consumers and businesses prioritize safety.

Cybersecurity experts said as the UAE continues to embrace digital finance, the risks associated with it are becoming more pronounced. With the festive season approaching, the call for increased vigilance resonates louder than ever. The UBF's commitment to enhancing public awareness and fostering a secure banking environment stands as a crucial bulwark against the rising tide of financial fraud.

“”As we navigate the evolving digital landscape, understanding the threats and taking necessary precautions will be essential in safeguarding their financial futures,” digital transaction experts said.

They said residents should be cautious when clicking on links or providing personal information online.“Use strong and unique passwords for all online accounts. Monitor your accounts regularly for suspicious transactions. Use two-factor authentication whenever possible. Keep your devices and software up to date with the latest security patches,” experts cautioned.

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