Issue 10
October 2024
Welcome to the MBA's News Digest!
Dear readers,
Mauritius, a Global Specialist?
Mauritius has improved its position in The Global Financial Centres Index 36 (GFCI 36), now ranking 60th globally, and maintaining its 5th position in the Middle East & Africa region.
Our IFC continues to be profiled as a Global Specialist by GFCI 36, and is recognised among the 15 financial centres most likely to gain significance over the next two to three years.
In global news, with flows of money becoming more and more intertwined with the emergence of cryptocurrencies, traditional financial institutions are increasingly involved in managing crypto value flows.
“If you’re not doing crypto, crypto will be done to you,” one might say.
Best wishes,
The MBA team
Treasury Takes Coordinated Actions Against Illicit Russian Virtual Currency Exchanges and Cybercrime Facilitator
26 September 2024
‘Today, the U.S. Department of the Treasury is undertaking actions as part of a coordinated international effort to disrupt Russian cybercrime services. Treasury’s Financial Crimes Enforcement Network (FinCEN) is issuing an order that identifies PM2BTC—a Russian virtual currency exchanger associated with Russian individual Sergey Sergeevich Ivanov (Ivanov)—as being of “primary money laundering concern” in connection with Russian illicit finance. Concurrently, the Office of Foreign Assets Control (OFAC) is sanctioning Ivanov and Cryptex—a virtual currency exchange registered in St. Vincent and the Grenadines and operating in Russia. The FinCEN and OFAC actions are being issued in conjunction with actions by other U.S. government agencies and international law enforcement partners to hold accountable Ivanov and the associated virtual currency services.’
ABBL responds to European Commission's public consultation on the Directive on Administrative Cooperation
1 October 2024
‘The ABBL recognises the significant steps the European Union has taken to create a comprehensive framework aimed at enhancing tax transparency and fostering international cooperation. The framework plays a crucial role in the fight against tax evasion, a priority for both national governments and the European Commission. However, the ABBL emphasises that the obligations regarding the exchange of information must remain proportionate, coherent, and harmonised. The association calls for any reassessment of the current framework to take these principles into account to ensure a balanced and fair approach for financial institutions.’
All the Bank Branches Where South Africans Can Get a Smart ID and Passport – With More on the Way
25 September 2024
‘South Africans can get their Smart IDs and passports from 30 bank branches across South Africa, and more are likely on the way. The partnership between the Department of Home Affairs and major banks started eight years ago. South Africans book their applications or renewal appointments via the eHomeAffairs website. They then go to a bank branch to provide their biometrics and return to collect their documents from the same branch. Currently, Standard Bank offers the most branches where South Africans can use the service at 9. FNB follows in second with 7, while Nedbank and Absa have seven branches that offer the service. Discovery Bank and Investec customers can also use the system at the banks’ head offices in Sandton. More branches are also lined up for the future.’
ABBL responds to the ECB consultation on outsourcing cloud services to cloud service providers
26 September 2024
‘In this regard, the European Central Bank (ECB) conducted a public consultation that run until mid-July on its draft Guide on outsourcing cloud services to cloud service providers. The consultation aimed to gather feedback on supervisory expectations for financial institutions outsourcing critical functions to the cloud. With the growing reliance on cloud technologies, the ECB seeks to ensure that risks related to operational resilience and cybersecurity are effectively managed. Considering the importance of cloud computing for the growing number of its members, the ABBL provided a comprehensive response to the ECB’s consultation on outsourcing cloud services to cloud service providers.’
The end of LIBOR
1 October 2024
‘Yesterday, 30 September 2024, the remaining synthetic LIBOR settings were published for the last time and LIBOR came to an end. All 35 LIBOR settings have now permanently ceased. The transition away from LIBOR, once referenced in an estimated $400 trillion of financial contracts, has made financial markets safer, more stable and fit for modern use. UK regulators, their international counterparts and market participants have worked together over the past decade to move to risk-free rates (“RFRs”), based on robust data. Synthetic LIBOR was a temporary bridge to give firms more time to move outstanding legacy LIBOR-linked contracts towards alternative RFRs, allowing for an orderly cessation.’
“If you’re not doing crypto, it'll be done to you.” The role of financial institutions in addressing crypto-related money laundering
27 September 2024
‘Crypto is likely here to stay, presenting both opportunities for innovation and challenges for regulation. It’s essential that we strike a balance between addressing the financial crime risks, such as money laundering and terrorism financing, and fostering an environment that encourages entrepreneurship and innovation. To this end, financial institutions, regulators and tech firms must work together to ensure compliance, transparency and safety in the evolving landscape of cryptocurrencies.’
Four insights for UK firms in the year of the PEP
25 September 2024
‘The recent review by the Financial Conduct Authority (FCA), along with updates to the UK’s anti-money laundering regulations, has resulted in new requirements for firms: they must now classify ‘domestic’ PEPs as inherently lower risk compared to ‘non-domestic’ PEPs as long as there are no ‘high-risk indicators’ present. With the recent election completed and new MPs in office, UK firms are now facing the challenge of adjusting to these changes in guidance. As firms make operational adjustments in light of the UK’s regulatory update, the spotlight on PEPs presents an opportunity to reflect on four key insights.’
OCC updates supervisory operating plan with expanded focus on capital, third-party risk
1 October 2024
‘Many supervisory priorities for the OCC in FY25 are the same as the previous fiscal year, including a focus on the areas of credit, asset and liability management, cybersecurity and bank operations. New this year is more detailed guidance for examiners in the areas of capital and third-party risk. In terms of the latter, the document instructs examiners to “determine when third-party and other subcontracted relationships, particularly those with financial technology companies that provide consumers and businesses access to banking products and services, represent significant operational, compliance, strategic, financial, reputation or other risks.” ’
Redefining “Financial Security”
1 October 2024
‘Online, it could include identity theft, or misuse of customer information. These activities are often linked so both departments need to work together as one team. At many banks, fraud and risk management are continuing to get more attention, and physical security departments need to work closely with IT teams to guard against on-premise and cyber-attacks. It’s important to have state-of-the-art camera systems as a first line of defense against fraud of any type at a financial institution. In terms of the general cybersecurity landscape, two of the biggest network threats are botnets, which take over or flood your network and cause denial of service, and ransomware, malicious software designed to block access to a computer system.’
Keeping Fraudsters at Bay
1 October 2024
‘LexisNexis Risk Solutions makes it simpler and easier for financial institutions of any size to safeguard their customers’ accounts. Banks can prevent fraud without sacrificing the customer experience, a key factor in client acquisition and retention, by implementing a flexible, multilayered solution. Financial institutions can assess the fraud risk associated with each customer interaction through multilayered, risk-based workflow solutions. User profiles that pose less risk encounter fewer hurdles in creating and managing accounts, while those with red flags surrounding their identity undergo more rigorous verification procedures.’
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