Issue 15
November 2024
Welcome to the MBA's News Digest!
Dear readers,
A confluence of forces is reshaping the financial services sector, as we approach late 2024, and move toward 2025.
Can you name the five key drivers shaping its future?
Hint: they may not be the ones you immediately think about.
Best wishes,
The MBA team
New BoM Governor takes office
Dr. Rama Krishna Sithanen has taken office as Governor of the Bank of Mauritius for a period of three years, effective 16 November 2024.
The Mauritius Bankers Association extends its congratulations to Dr. Sithanen. We look forward to collaborating with his team, towards the development of the banking sector.
Money Laundering National Risk Assessment Guidance
November 2024
‘An NRA is a comprehensive process used by countries to identify, assess, and understand the ML and/or TF risks they face. This process involves evaluating threats and vulnerabilities, determining the level of risk, and developing strategies aligned to ML risks. This includes taking enhanced measures where risks are higher and taking simplified or lesser measures where risks are lower. While the end result of the process may or may not be a written product, the understandings reached, and follow-on actions taken are of paramount importance. The NRA provides an evidence-based foundation for informed policymaking, resource allocation, and the implementation of effective AML/CFT measures. It ensures that national strategies are aligned with the specific risk landscape of the country and that they address both domestic and international threats to the extent they are connected to the country.’
MAS Announces Plans to Support Commercialisation of Asset Tokenisation
4 November 2024
‘The Monetary Authority of Singapore (MAS) today announced plans to advance tokenisation in financial services. These include: forming commercial networks to deepen liquidity of tokenised assets; developing an ecosystem of market infrastructures; fostering industry frameworks for tokenised asset implementation; and enabling access to common settlement facility for tokenised assets… MAS has, under Project Guardian, convened over 40 financial institutions, industry associations and international policymakers across seven jurisdictions to carry out industry trials on the use of asset tokenisation in capital markets. To-date, more than 15 industry trials have been conducted in six currencies across multiple financial products.’
The future of financial services: Five key drivers
12 November 2024
‘Five key drivers—digital transformation, climate related financial risk, interest rate and debt dynamics, regulatory evolution, and artificial intelligence—are at the forefront of this shift. These factors are setting the stage for emerging trends that financial institutions must embrace to remain competitive. These interconnected drivers are not only redefining traditional strategies but also presenting unprecedented opportunities and challenges for financial institutions worldwide…. One of the most transformative developments in this digital journey is the rise of embedded finance. This concept involves integrating financial services seamlessly into non-financial platforms and everyday consumer activities. For instance, ride-sharing apps offering in-app payment solutions or e-commerce websites providing instant financing at checkout exemplify embedded finance in action.’
Digital bank backed by Ant targets smaller businesses with quick, easy financial services
13 November 2024
‘Anext Bank, a Singapore-licensed digital wholesale bank established two years ago, has made its name by providing digitised, cross-border financial services to micro, small and medium-sized enterprises (MSMEs) that were impacted by the Covid-19 pandemic. Anext Bank CEO Toh Su Mei said MSMEs have a rising expectation of digitalisation, especially after the pandemic. “By deploying our strategy of embedded finance, putting our financial services on regional and global platforms, unifying our financial services and breaking down borders, we make financial services a lot more accessible for regional and global MSMEs,” she said.’
Assessing third party risk management in financial institutions
12 November 2024
‘Knowing the need for accurate third-party data on a variety of risk factors is paramount, solely relying on third parties to provide updates on everything, and without verification, puts financial institutions’ resilience at risk. By working with a trusted external data provider, financial services firms can build a dynamic and accurate data foundation. This can be delivered via automated workflows already part of the third-party risk assessment process, with ongoing monitoring and change notification. By working with a data partner, banks can fulfil obligations and improve resilience, without needing to put additional pressure on resources, or build new systems.’
Keeping banking customers safe from financial abuse
1 November 2024
‘The new Safety by Design toolkit, developed by Westpac and made accessible to the sector, will give banks access to more guidance to ensure products and services are designed to better safeguard customers from financial abuse and to identify perpetrators of financial abuse. ABA CEO Anna Bligh said that Australian banks were leading the charge in making banking safer for customers. “Banking staff on the frontline see instances of financial abuse every day,” Ms Bligh said. “Safety by Design principles allow bankers to put user safety and rights at the centre of the design of banking products. This means it will be harder for perpetrators to exploit banking products and services to control and financially abuse people.” ’
New scams prevention framework key to winning war against scammers
7 November 2024
‘Address autocomplete or lookup services are valuable pieces of technology to use at the customer onboarding stage. They provide accurate address data in real-time when onboarding new customers by delivering a properly formatted, correct address when they commence inputting theirs. They also reduce the number of keystrokes required, by up to 81 per cent, when typing an address. This speeds up the entire onboarding process, reducing the probability of the user not completing an application to access a service, for example. This approach to first point of contact verification can be extended to email and phone, so that these important contact data channels can also be verified in real-time.’
Britain's watchdog fines Metro Bank $20 million for control failings
12 November 2024
‘The percentage of synthetic identities among accounts opened by U.S. lenders for auto loans, bank credit cards, retail credit cards and unsecured personal loans reached an all-time high at the end of the first half of 2024, the credit reporting agency TransUnion said in a new report on fraud. As a result of the increase, lenders were exposed to $3.2 billion in potential losses, which is also an all-time high and 7% more than the end of the first half of 2023… TransUnion also found an increase in “credit washing,” which is a scam where criminals using synthetic identities attempt to wipe out negative information from an identity’s credit history by making a false claim of identity fraud. “These false credit report disputes could be made against accounts opened using a stolen consumer identity or synthetic identity, or unauthorized transactions on a consumer’s legitimate credit account,” according to the report.’
'Underbanked' households more likely to own crypto, FDIC report says
12 November 2024
‘American households that rely on services like check cashing and payday loans to make ends meet are more likely to hold cryptocurrencies, with all the risks they bring, than those who have more access to traditional banks, according to a government report released Tuesday. The report from the U.S. Federal Deposit Insurance Corporation also showed that one in eight shoppers using buy-now-pay-later (BNPL) services had made a payment late or missed it on at least one purchase.’
Survey: Mortgage lenders helping customers navigate tough market reap benefits
12 November 2024
‘According to survey findings, Interpersonal relationships with local brand reps are critical to satisfaction. The only factor showing gains in this year’s study is people, which has risen by a single point. The factors showing the biggest year-over-year declines in customer satisfaction are digital (-8 points); communication (-5); and loan offering met my needs (-5). In fact, when local brand representatives are directly involved in the mortgage origination process, overall satisfaction rises 40 points. Lenders who become advisors were important for navigating a tough market, respondents said. Lenders that actively advise clients throughout the lending process drive significantly higher customer satisfaction scores. The satisfaction score for trust among borrowers who strongly rely on the lender’s expertise to get through the borrowing process is 133 points higher than among those borrowers who do not strongly rely on the lender’s expertise.’
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