Account Verification Solutions (AVS) are critical tools for ensuring regulatory compliance, safeguarding against financial crime, and maintaining customer trust. Within the UAE regulatory environment, AVS plays a growing role in aligning regulated entities, whether financial or non-financial, with Customer Due Diligence (CDD) and anti-money laundering (AML) obligations under national legislation and the Central Bank of the UAE (CBUAE) framework.
While AVS may be seen as a business decision or commercial upgrade, the compliance implications are material, especially for any business disbursing funds to customers, merchants, or third parties.
Regulatory Context: AML/CFT and KYC Requirements in the UAE
The UAE’s AML/CFT framework (Federal Decree-Law No. 20 of 2018 and its Executive Regulations), along with the CBUAE Guidance, outlines obligations for all regulated entities to implement strong due diligence measures when handling customer funds.
Key principles include:
- Verifying the identity of the payee or beneficiary before executing a disbursement.
- Ensuring the account being credited is indeed owned by the intended recipient.
- Maintaining records and detecting suspicious activities where payments may be misused.
These requirements do not apply only to banks or finance companies. Any regulated entity that makes fund payouts, including telcos offering cashback, retailers running loyalty refunds, e-commerce platforms, or BNPL firms, must ensure they are not inadvertently facilitating fraud or money laundering.
Non-compliance can lead to:
- Regulatory action or penalties under AML/CFT laws.
- Business disruption through audits, inspections, or enforcement measures.
- Reputational harm due to customer disputes or public scrutiny.
A recent example: In July 2025, the CBUAE sanctioned multiple institutions for AML/CTF compliance failures, including gaps in verifying beneficiary information during disbursements.
- Why AVS Is Not Just for Financial Institutions
A common misconception is that AVS is only required by traditional financial institutions. In fact, any regulated business disbursing funds to third parties must ensure funds are not sent to the wrong person or entity.
Entities that fall under this scope may include:
- Buy Now Pay Later (BNPL) platforms
- Licensed lending and microfinance firms
- Insurance companies
- E-commerce and gig economy platforms
- Loyalty and reward-based businesses
- Large enterprises making salary advances or payouts
If your business sends money, you have exposure to financial crime risk and thus a duty to validate account ownership.
- Risks of Skipping AVS
Without a reliable AVS framework, businesses face several material risks:
- Fraud: Fraudsters may impersonate customers or substitute bank details to hijack payouts.
- Money Laundering: Funds may be funneled to unrelated third-party accounts, increasing exposure.
- CDD/AML violations: Regulators may see unverified disbursements as control failures
- Customer harm & legal risk: Incorrect payouts cause disputes, delays, and damage trust.
A single misdirected payout can lead to customer churn, fines, or reputational backlash. Robust AVS mitigates these risks.
- Business & Operational Benefits
AVS is also a strong commercial enabler, offering tangible ROI:
- Fraud reduction: Internal estimates suggest AVS can reduce payout fraud by up to 95%.
- Efficiency: AVS minimizes back-office load. Businesses report saving ~14 man-hours/week on reconciliation.
- Customer satisfaction: 1 in 5 disbursements is delayed due to incorrect banking info—AVS prevents this.
- Reduced support volume: AVS lowers complaint rates tied to failed payouts, improving NPS and reducing cost-to-serve.
By verifying bank account ownership before a transaction, businesses protect both themselves and their customers.
- Lean’s AVS Offering – Regulatory and Operational Fit
Lean provides Account Verification Services under regulatory frameworks designed to protect consumer data and align with AML/CTF standards.
Key facts:
- Authorized by FSRA in ADGM: Lean is licensed to offer Third Party Services, including AVS.
- CBUAE licensing in progress: Reflecting Lean’s commitment to full UAE compliance under Open Finance and RPSP regimes.
- Data protection: Lean complies with UAE Personal Data Protection Law (PDPL – Federal Decree-Law No. 45 of 2021) and applies:
- AES-256 encryption for data in transit and at rest
- Anonymization where applicable
- Role-based access control
- Independent security audits (e.g., ISO 27001)
Importantly, Lean acts as a facilitator, not a data controller, clients retain full control of customer data.
Conclusion
AVS is a compliance and risk management control essential for any business disbursing funds. In the UAE, where AML/CTF enforcement continues to strengthen, businesses must ensure they verify beneficiary account ownership, or risk regulatory and reputational fallout. By integrating AVS, businesses (financial or non-financial) can:
- Align with UAE AML/CTF expectations
- Prevent fraud and disputes
- Enhance the customer experience
- Reduce operational costs
AVS should be viewed not as a tech feature but as a core compliance and trust enabler, and implemented accordingly.
