Issue 18
December 2024
Welcome to the MBA's News Digest!
Dear readers,
Australia is surfing on the digital banking boom, while inclusion takes centre stage in the UK with the first meeting of the new Financial Inclusion Committee.
FinCen joins forces with financial regulatory bodies to tackle elder financial exploitation, estimated at $27 billion in 2023, in the U.S.
Global Finance Magazine quizzes African banking heads on the youngest continent’s progress, economic growth, and challenges.
Best wishes,
The MBA team
FinCEN Joins Agencies in Issuing A Statement on Elder Financial Exploitation
4 December 2024
‘The U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) has joined five federal financial regulatory agencies and state financial regulators in issuing a statement today to provide supervised institutions with examples of risk management and other practices that may be effective in combatting elder financial exploitation. Older adults who experience financial exploitation can lose their life savings and financial security and face other harm. A FinCEN Financial Trend Analysis of Bank Secrecy Act reports over a one-year period ending in June 2023 found that about $27 billion in reported suspicious activity was linked to elder financial exploitation.’
MAS and ABS Announce Launch of Electronic Deferred Payment Solutions in Mid-2025 and Extension of Deadline for Cessation of Corporate Cheques
5 December 2024
‘To provide greater convenience to corporates and individuals, ABS, in partnership with the Domestic Systemically Important Banks (D-SIBs), will be launching the new EDP and EDP+ solutions in mid-2025 to address the use cases of post-dated payments and transactions requiring greater certainty of payment respectively. Both EDP and EDP+ will be accessible via digital banking platforms, and will leverage PayNow to allow payers to identify payees conveniently when making payments via either solution. MAS encourages all cheque users to adopt these e-payment alternatives once they are made available.’
How Luxembourg Private Banks embrace digital transformation: survey by ABBL and KPMG reveals key insights
4 December 2024
‘Most survey respondents (66%) view digitalization as a top strategic priority and believe there is room for improvement to gain competitive edge in this area. The primary digitalization goals for private banks include adding new digital capabilities to existing products and services, enhancing customer satisfaction and user experience, and improving efficiency through the automation of business processes and addressing regulatory compliance obligations with a digital approach. However, this sense of urgency is only partially reflected in the financial and human resources allocated to digital transformation, as well as in governance and organizational structures. For example, only a limited number of private banks surveyed have appointed a Head of Digital Transformation or developed a clear digital transformation strategy.’
“The key is combining trustworthiness with modern technology”
3 December 2024
‘Based on my experience at the SBA, that isn’t how I see it. Many of our members, i.e. “traditional” banks, are in fact highly innovative. They are investing heavily in the digital transformation, working together with fintechs or developing their own digital platforms. However, banks often have to meet stringent regulatory requirements, and these can result in complex structures that have an impact on their speed of innovation. Combating money laundering, monitoring operational risks and ensuring transparency and data protection for their customers are good examples. Mastering this balancing act between innovation and compliance is a challenge, but it’s also a core competence of banks.’
SMS Sender ID Register welcome in ongoing war against scammers ?
3 December 2024
‘ “Text messages are one of the most common ways that Australians are exposed to scams. This register will make it harder for scammers to use telecommunication networks to reach people.” Ms Bligh said. “Impersonating banks, government agencies and popular brands in text messages is a common method used by scammers to deceive customers. “This register will be crucial to stopping SMS impersonation scams in their tracks before they can cause harm to Australians. “By requiring telcos to block known scam SMS numbers, Australia will have a new weapon to disrupt a popular business model that scammers use.’
Help for vulnerable Brits to access banking and credit in spotlight
5 December 2024
‘Made up of consumer groups and financial institutions, their focus on tackling financial exclusion will discuss ways to provide individuals with poor credit histories access to safe and affordable credit. The committee will also identify measures to support the 11.5 million people in the UK with less than £100 in savings limit their vulnerability to unexpected costs. Such low savings significantly increase their vulnerability to unexpected costs or unforeseen life events. Poor access to the right financial products and services can have a significant impact on people’s finances and wellbeing. Expanding credit will offer people more choices and help prevent them from resorting to predatory lenders, such as loan sharks or other exploitative financial practices.’
New RBA data shows rapid rise in digital payments
9 December 2024
‘ “This massive surge in mobile wallets demonstrates a clear shift towards digital payment solutions, reflecting the evolving preferences of consumers for faster and more secure payment options. “Go back a decade, and almost no one was making a digital wallet payment. Now we’re seeing over half a billion payments being made with mobile wallets in just one month. “With the ongoing surge in digital payments, it’s critical these transactions are subject to the same oversight and consumer protection laws as the rest of the payments system. “That’s why the ABA supports legislation currently in the Parliament that will ensure Australia’s payments regulatory framework remains fit-for-purpose and covers new entrants into the market.” ’
Balancing regulation, resilience, and innovation: The UK's Financial Sector and Cloud Migration
4 December 2024
‘Building this partnership is, however, easier said than done. Firms often assume that regulatory bodies have a technical understanding of advanced cloud concepts such as “auto-scaling failovers” or “distributed consensus algorithms.” In reality, many supervisors may not have significant or deep expertise in these areas. Therefore, the onus is on the firms to ensure that regulatory discussions are framed in clear, understandable terms. Avoiding overly technical jargon and instead focusing on providing clear, explainable narratives, that articulate how risk is managed and innovation is maintained, will facilitate smoother engagements. It is vital that regulators come away from these interactions with a solid understanding of the firm’s cloud strategy, without being “bamboozled by the science.” ’
African Banking Roundtable: New Focus On Capital Markets
9 December 2024
‘They recognize the potential of utilizing the capital markets to generate long-term financing. We have teams in both Ethiopia and in Rwanda, supporting the government in developing a legal and regulatory framework that will incentivize investors to participate, since it’s very important to have transparent principles by which these capital markets operate, and also visibility to investors. We’ve also participated in some interesting transactions, particularly in Tanzania, both with NMB Bank and CRDB Bank, where we anchored their bond issuances, which are focused on sustainability and climate finance. We see the capital markets as a way for financial institution issuers to introduce important thematic areas for investors to participate in.’
Federal Reserve expands check fraud detection tool to include commercial checks
5 December 2024
‘Federal Reserve Financial Services recently announced the expansion of FedDetect Duplicate Notification for Check Services to include commercial checks, alongside its existing Treasury check notification service. As a result, financial institutions can see deposit information and images of potential duplicate items for commercial checks, supplementing their existing check fraud mitigation tools, the Fed said in a statement. The FedDetect Duplicate Notification service offers banks of first deposit early notice of potential duplicate checks processed by the Fed banks. Reports are available for both commercial and Treasury checks deposited by financial institutions on the current day or within a specific date range, according to the Fed.’
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