Economic Archives | Digital Watch Observatory

Study examines trust and fraud prevention in AI-enabled banking in Bangladesh

A new non-peer-reviewed preprint examines how AI is shaping e-banking in Bangladesh, focusing on consumer decision-making, ethical trust, and fraud prevention.

The paper links AI adoption in digital banking to customer experience, risk management, process automation, financial inclusion and regulatory compliance, arguing that these factors are increasingly important as Bangladesh’s financial sector becomes more digital.

A study that uses a narrative literature review of recent research from 2024 and 2025 and builds its conceptual model on the UTAUT2 framework, which is commonly used to explain technology adoption.

The authors extend the model by adding ethical trust and fraud prevention as mediating mechanisms, arguing that consumers are more likely to use AI-enabled banking services when they see them as useful, secure, transparent and fair.

Ethical trust is treated as a central part of adoption. The paper identifies transparency, algorithmic fairness, data privacy, reliability, accountability and digital inclusion as key factors shaping how users respond to AI in banking.

It also notes that explainable AI tools and localised interfaces, including Bengali-language systems, could help reduce uncertainty for users with lower digital literacy.

Fraud prevention is presented as a critical enabler of consumer confidence. The authors point to real-time monitoring, anomaly detection, secure authentication, biometric e-KYC and explainable fraud alerts as tools that can reduce perceived risk.

Additionally, they argue that AI systems should not only detect fraud effectively, but also explain decisions clearly enough for users to trust them.

The paper also highlights Bangladesh-specific issues, including Islamic banking, Shariah-compliant AI models, rural and urban digital access gaps, and the need for inclusive design. However, the study remains conceptual and has not yet been peer reviewed.

The authors recommend future empirical research with Bangladeshi banking users to test the model across income levels, regions, generations and gender groups.

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China pushes AI self-reliance while expanding global cooperation

Chinese Vice Premier Ding Xuexiang has reiterated China’s emphasis on AI self-reliance while also calling for deeper international cooperation, underscoring a dual approach to technology policy amid rising global competition. Speaking at the opening of the 9th Digital China Summit, he presented AI as an important part of China’s wider modernisation agenda.

Ding said China should strengthen self-reliance and independent innovation in AI, arguing that the sector must be able to withstand external pressure and attempts at suppression. He also emphasised application-driven development, calling for faster integration of AI into the real economy to support productivity and industrial transformation.

Alongside those domestic priorities, he called for a more collaborative innovation ecosystem, including closer coordination across the AI industry chain. Internationally, he advocated open and mutually beneficial cooperation, with particular emphasis on computing power, data, and talent.

Regulation also featured prominently in the speech. Ding said AI development must remain safe and controllable, with stronger oversight to ensure the technology serves human interests and remains under human control. Taken together, the message reflects China’s broader effort to balance technological sovereignty with continued international engagement.

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Crypto crackdown intensifies in Kazakhstan over illegal exchanges

Kazakhstan’s financial regulator has warned that several major cryptocurrency exchanges are operating without the licences required under the country’s current digital asset framework, reinforcing its strict authorisation regime.

The Astana Financial Services Authority identified prominent platforms, including HTX, Bitget, OKX, and MEXC, as operating without the necessary permits. Under existing rules, only entities licensed within the Astana International Financial Centre are allowed to provide regulated digital asset services.

Authorities stressed that international popularity does not exempt platforms from complying with local law. They also warned that unauthorised exchanges can expose users to financial losses, data breaches, and fraudulent schemes, and urged the public to verify platforms through the official register of licensed firms. AFSA’s website currently shows a regulated ecosystem with dozens of authorised entities across the AIFC framework.

The warning comes amid broader enforcement efforts as Kazakhstan tries to formalise its crypto sector while positioning itself as a regulated regional hub for digital assets. In parallel, law enforcement agencies have reported wider crackdowns on illegal crypto activity, including shadow exchanges and money-laundering networks.

Why does it matter?

Kazakhstan’s tightening enforcement shows a broader push to bring crypto activity into a more formal and supervised market structure. By restricting unlicensed platforms and steering users towards authorised entities, the authorities are trying to reduce exposure to financial crime, improve market transparency, and build credibility for Kazakhstan’s ambition to become a regulated regional digital asset hub.

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Tax season phishing scams surge with fake government sites

Cybercriminal activity tends to intensify during tax-return season, as taxpayers face tighter deadlines and share sensitive financial information. A recent Kaspersky analysis highlights the growing use of fake tax authority websites, phishing emails, and malicious downloads designed to steal personal and banking data.

Attackers are impersonating official revenue services across multiple countries, creating convincing portals that mimic government branding and online tax services. Victims are often prompted to enter login credentials, payment details, or download files containing malware aimed at compromising devices or extracting sensitive information.

Crypto holders are also being targeted through fake compliance portals and fraudulent regulatory notices. These schemes try to trick users into revealing wallet recovery phrases or linking digital wallets, which can lead to full asset theft once access is granted.

AI adds another layer of risk. Kaspersky warns that users who upload tax documents or personal financial data to unverified AI platforms may expose confidential information to leakage, misuse, or further fraud. More broadly, AI is also making phishing and impersonation campaigns easier to scale and harder to detect.

Security experts recommend relying only on official tax channels, checking websites and email sources carefully, avoiding unsolicited downloads, and using secure storage and trusted protection tools when handling tax documents.

Why does it matter?

Tax-season phishing campaigns show how financial data is increasingly being treated as a high-value target for cybercrime. As tax systems, digital finance, crypto assets, and AI tools overlap more closely, a single successful scam can lead not only to immediate financial loss but also to identity theft, device compromise, and broader damage to trust in digital services.

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Digital Dubai rolls out AI workforce programme across public sector

Digital Dubai has launched the AI Workforce Transformation Programme to train 50,000 government employees in AI skills. The initiative is being delivered with the Dubai Government Human Resources Department and the Dubai Centre for Artificial Intelligence.

The programme aims to equip staff with practical knowledge to apply AI in public services and internal processes. It includes tailored training tracks based on job roles, from leadership to general employees.

Officials say the initiative will improve productivity, support innovation and enable more efficient service delivery. It also forms part of wider efforts to strengthen AI adoption across government operations.

The programme is designed to build long-term institutional capabilities and support a technology-driven government model. The initiative was launched by Digital Dubai in Dubai.

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Europol’s IOCTA 2026 shows growing cyber threats across Europe’s digital landscape

The 2026 Internet Organised Crime Threat Assessment has been released by Europol, outlining the growing complexity of cybercrime across Europe. The report identifies encryption, proxies, and AI as key drivers behind the increasing scale and sophistication of digital threats.

According to Europol, criminal networks are adapting rapidly, using fragmented online environments and encrypted communication channels to evade detection. The report highlights cybercrime enablers, online fraud schemes, cyber-attacks, and online child sexual exploitation as central areas of concern in the EU threat landscape.

AI is playing a growing role in cyber-enabled crime by making fraud, deception, and other forms of online abuse more scalable and more convincing. Europol presents this as part of a wider shift in which digital threats are becoming more adaptive, more accessible, and harder to disrupt through traditional law enforcement methods alone. This is an inference based on Europol’s framing of AI as a major force expanding cybercrime.

The report also points to continued risks in cyber-attacks and online child sexual exploitation, underlining how technological change is affecting both financially motivated crime and harms involving vulnerable users. In that sense, IOCTA 2026 presents Europe’s cyber challenge not as a series of isolated incidents, but as a broader digital threat environment shaped by enabling technologies and rapidly evolving criminal tactics. This is an inference grounded in Europol’s description of the report’s main threat areas.

These developments reinforce the need for stronger operational cooperation, more advanced investigative capabilities, and continued adaptation across Europe’s law enforcement and regulatory systems. Europol’s overall message is that cybercrime is becoming more sophisticated, more industrialised, and more deeply embedded in the wider digital ecosystem. This is an inference based on the report’s scope and framing.

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UK moves to strengthen sovereignty over critical AI infrastructure

Britain is moving to strengthen its position in the global AI race, with Technology Secretary Liz Kendall calling for greater national control over key parts of the AI stack. In a recent speech, she described artificial intelligence as an increasingly important source of economic strength, security, and geopolitical influence.

Concerns centre on the concentration of power in a small number of companies that control much of the world’s advanced AI computing capacity. The government’s strategy is intended to reduce reliance on external providers while building domestic capabilities across areas such as research, infrastructure, compute, and talent.

Plans include the development of a national AI hardware strategy to improve access to chips and other critical technologies. At the same time, Britain says it will focus on sectors where it believes it holds a competitive edge, while continuing to work with allies on standards, governance, and the international rules shaping AI development.

Officials have stressed that AI sovereignty does not mean technological isolation, but stronger strategic resilience and greater influence over how future systems are built and governed. In that context, support for domestic firms and institutions is being framed as essential if Britain is to remain a serious player in the emerging global AI order.

Why does it matter?

Control over AI infrastructure is quickly becoming a core element of national power, comparable to energy or defence capabilities.

Concentration of computing and advanced chips in a few global players creates strategic vulnerabilities, exposing countries to external decisions that can affect economic stability, security and technological development.

Britain’s push for AI sovereignty reflects a broader global trend towards technological self-determination. Efforts to build domestic capacity and shape international standards could influence global AI governance, access to critical technologies, and reshape alliances in a more fragmented digital order.

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Singapore urges organisations to strengthen AI governance frameworks

GovTech Singapore has argued that stronger AI governance in workplaces is essential for trust, compliance, risk management, and responsible innovation as AI adoption expands across business operations.

The agency leading Singapore’s Smart Nation and digital government efforts defines AI governance as a framework of policies, processes, and responsibilities guiding the ethical, transparent, and accountable development and deployment of AI systems within an organisation. The framework is linked to oversight across the AI lifecycle, from design through to ongoing monitoring.

Key elements identified by GovTech Singapore include transparency and explainability, fairness and bias mitigation, accountability and human oversight, and data privacy and security. Responsible AI is also linked to Singapore’s wider Smart Nation agenda, which the agency describes as a national priority.

The guidance recommends that organisations establish clear internal policies on AI use, build AI literacy across teams, carry out regular audits and assessments, and prioritise secure development practices. It also points to Singapore’s Model AI Governance Framework for Generative AI, developed by the AI Verify Foundation and the Infocomm Media Development Authority, as a reference point for businesses adapting governance frameworks to their own needs.

As part of its effort to support responsible AI use in the public sector, GovTech Singapore also highlights its AI Guardian suite. The suite includes Litmus, a testing platform using adversarial prompts to identify risks and vulnerabilities, and Sentinel, a guardrails service designed to detect and mitigate unsafe or irrelevant content before it affects AI models or users.

Overall, GovTech Singapore presents AI governance not only as a compliance issue, but as part of building a trusted digital environment in which AI can be deployed safely and effectively.

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The digital asset framework in Australia enters a critical rollout period

Australia’s crypto sector is entering a critical transition period as digital asset reforms move from policy design into implementation. Two overlapping timelines now define the landscape: immediate AUSTRAC AML/CTF and virtual asset service obligations, and a broader ASIC Digital Assets Framework set to commence in 2027.

Key compliance measures are already active or imminent, including stronger AML/CTF obligations and the Travel Rule from July 2026. Existing financial services law also continues to apply, meaning firms must operate within current licensing requirements while preparing for the next regulatory phase.

Policy development is also converging around stablecoins and scam prevention. While stablecoins are being addressed through payments reform and related financial regulation, scam prevention falls within a broader national framework that spans multiple sectors. In that environment, crypto exchanges occupy a particularly important point of control, where funds move on-chain and where detection and intervention efforts can be most effective.

Authorities and market participants increasingly recognise that the next 18 months will be decisive in showing how these systems work in practice. Stronger alignment with international standards, including FATF expectations, is likely to shape Australia’s shift from regulatory planning to active supervision and enforcement.

Why does it matter?

Australia’s approach reflects a broader global shift from fragmented crypto oversight towards a more integrated financial system regulation. As digital assets become more closely tied to payments, investment flows, and cross-border transfers, governments are increasingly treating crypto infrastructure as part of core financial plumbing rather than a separate experimental market. However, this is an inference grounded in the structure and timing of the reforms now underway.

From a wider perspective, the real significance lies in systemic coordination. Combining AML enforcement, stablecoin oversight, and scam prevention will help determine whether illicit activity can be disrupted at the point of conversion rather than only after funds are lost. How effectively Australia connects these layers will shape not only domestic market integrity, but also its credibility within evolving international standards for digital finance governance.

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United Arab Emirates exit from OPEC raises pressure on global oil market stability

Oil prices fell after the United Arab Emirates said it would leave the Organisation of the Petroleum Exporting Countries (OPEC), a move that could weaken the group’s ability to manage global supply amid heightened regional instability.

The announcement was widely seen as a sign of growing strain inside the producer bloc. The UAE, one of OPEC’s larger oil producers, has for years signalled frustration with output quotas that limited its ability to expand exports.

Analysts said its departure could eventually increase supply and ease some upward pressure on prices.

Yet the broader energy outlook remains shaped more by internal OPEC dynamics than by the ongoing war involving Iran and the disruption in the Strait of Hormuz. With a key global oil transit route still affected, markets remain driven by uncertainty over regional security and stalled US-Iran talks.

That leaves the UAE’s move open to two readings. On one hand, it reflects a sovereign effort to gain more flexibility and protect national economic interests. On the other hand, it raises questions about OPEC’s future cohesion and the effectiveness of producer coordination during a period of geopolitical and market stress.

Why does it matter?

The development highlights the growing overlap between energy governance and diplomacy. While the UAE’s decision points to internal strain within OPEC, the wider crisis involving Iran shows how quickly unresolved conflict can reshape supply expectations, investor sentiment, and broader economic conditions. For now, markets appear to be weighing the prospect of looser supply against the continued risks of instability in the Gulf.

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