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Mitigating The Threat Of Fraud For SMEs Is Key To Empower The UAE's Economic Future The future for the UAE is incredibly bright, but our economy and our workforce will never hit our full potential if we fail to successfully address the threat of fraud against the SMEs.

By Prateek Vahie

Opinions expressed by Entrepreneur contributors are their own.

You're reading Entrepreneur Middle East, an international franchise of Entrepreneur Media.

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If you spend just one day in the UAE, it is impossible to miss the excitement in the air around the growth trajectory of the nation. Investment capital and talented workers are arriving from around the world, deals are happening, companies are growing, and construction cranes are an unmissable sight along the skyline.

While the big-name energy producers, construction firms, technology companies, banks, and investment funds that are operating on an international scale often capture the news headlines, it is the small and medium-sized enterprises (SMEs) that are driving forward long-term, sustainable economic growth.

For each publicly listed company or major investment fund that has billions of dollars in market value, there are dozens of SMEs that are embracing the innovative spirit and flexibility that comes with operating on a smaller scale to design and drive forward new products and services.

It is these SMEs that form the economic backbone of the UAE, and they are a critical cornerstone of our gross domestic product (GDP) and employment. As the nation accelerates its economic innovation and diversification journey, it is SMEs that will unlock the value of new industries.

The numbers may surprise you. In recent years, SMEs in the UAE have grown to 350,000 entities that contribute 60% of the UAE's current GDP, and employ 86% of the labor force. In Dubai, SMEs make up 95% of all businesses, while in Abu Dhabi, the sector has seen a compound annual growth rate of 14% from 2021 to 2023, making a significant impact on the wholesale and retail trade, construction, and support services sectors.

Yet, these SMEs face many challenges to reach their full potential, including access to finance, digital transformation, and increasingly, the threat of fraud. The ramifications from a successful fraud attack against an SME can be massive and involve financial losses, reputational damage among customers and stakeholders, and operational disruptions that undermine the company's growth trajectory.

The threat of fraud is no small issue. Every year, up to 5% of global corporate revenue is lost to fraud, equaling $4.7 trillion in diminished value. And it is SMEs, which often have smaller cybersecurity teams or may lack the latest security systems, that are often more vulnerable to fraud. Fraud can take many forms, posing a constantly changing challenge to SMEs.

Related: Dial An SME: Five Reasons Why You Should Be Working With Entrepreneurs In The UAE

At Wio Bank, we're building a platform for the digital age that provides tailored financial solutions, digital tools, and advisory services as well as lending, credit cards, supply chain financing, and easy remittance for the best foreign exchange (FX) rates as methods to support working capital needs for SMEs.

As the threat of fraud grows, we're building prevention measures to ensure secure operations. At the heart of this defense, we leverage cutting-edge technologies such as artificial intelligence (AI)-driven analytics, real-time monitoring, and robust cybersecurity systems to provide early detection of fraud risk and then prevent and mitigate the threat.

We are constantly developing new tools to combat fraud that leverage technologies to detect liveness and behavior analytics to help our company understand if it is in fact our customers trying to access their accounts, and implementing cooling off periods and reduced transfer limits if a risk is detected. We're also building real-time monitoring to notify both the bank and customers to take immediate action if a risk is detected, such as log-in attempts from unknown or high-risk locations or other abnormal behavior, as well as a dedicated cybersecurity team that monitors for malicious, spoofing, and phishing attacks and take appropriate action.

This is an effort that never takes a break, and we are constantly running vulnerability assessment and penetration testing to locate weaknesses in our system and revere engineering the system to fortify vulnerabilities. However, neither Wio Bank nor any other single company, bank, or government entity can prevent fraud on its own. It requires cross-sector collaboration among financial institutions, policymakers, and stakeholders to work together to create governance frameworks and to share best practices and market intelligence. It will also require these various entities in the technological infrastructure to combat fraud and take the time to educate SMEs about the needed steps to protect their businesses, including educating customers via social media and direct communication about different kinds of scams.

The future for the UAE is incredibly bright, but our economy and our workforce will never hit our full potential if we fail to successfully address the threat of fraud against the SMEs that form the backbone of the nation's economy, and drive the innovation and entrepreneurship that will attract international capital, as well as the very best of the world's skilled workforce.

At Wio, we are providing the tailored financial solutions that SMEs require, and we are fully committed to empowering their growth, simplifying financial management, and enhancing business opportunities. And we are building to help SMEs defeat the threat of fraud, and reach their full potential.

Related: A Blueprint For The Evolution Of The SME Sector In The Middle East

Prateek Vahie is the Chief Commercial Officer of Wio Bank.

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