Issue 19
December 2024
Welcome to the MBA's News Digest!
Dear readers,
Europe’s financial sector enters a pivotal moment with the full implementation of the Digital Operational Resilience Act by January 17, 2025; calling for a paradigm shift as cyber threats escalate in both sophistication, and frequency.
During a speech on fraud, U.S. Acting Comptroller of the Currency Michael Hsu states banks, and bank regulators can do more to address financial fraud, but they also need third parties such as social media platforms and telecommunications providers to do their part.
The Mauritius Bankers Association launches its awareness campaign, in a bid to increase use of digital payments, and curb phishing attempts, especially during the festive season.
Best wishes,
The MBA team
Servi dizital, li safe!
The Mauritius Bankers Association’s awareness campaign on the safe use of digital channels, especially during the festive season, kickstarted on Monday 16 December 2024 on TV, and all major radio stations. Stay tuned for new developments next week onwards.
Final guidelines for counterparty credit risk management
11 December 2024
‘The Basel Committee on Banking Supervision has issued guidelines for banks’ counterparty credit risk (CCR) management. The guidelines include key practices critical to resolving long-standing industry weaknesses in CCR management, including the need to: (i) conduct comprehensive due diligence at both initial onboarding, as well as on an ongoing basis; (ii) develop a comprehensive credit risk mitigation strategy to effectively manage counterparty exposures; (iii) measure, control and limit CCR using a wide variety of complementary metrics; and (iv) build a strong CCR governance framework. The guidelines will replace the Committee’s Sound practices for banks’ interactions with highly leveraged institutions published in January 1999.’
How financial institutions can lead the way in digital trust for 2025
5 December 2024
‘Digital trust isn’t just a technological challenge—it’s a business-critical issue that requires a strategic approach. The Future of Digital Trust: Establishing the Foundations for a Resilient, Efficient, and Safer Online World report provides valuable insights into how financial institutions can address these challenges. With actionable strategies around legacy tech, collaboration, regulation, and transparency, the report equips organisations to protect customer confidence and achieve sustainable growth in 2025.’
Recent FCA fines: A wake-up call for financial crime controls
9 December 2024
‘This has, yet again, been demonstrated recently when the FCA issued two more significant fines, both for financial crime systems and control failings. There should be no doubt in anyone’s mind that the FCA are taking seriously their objective of protecting and enhancing the integrity of the UK financial system. They have been increasingly clear about their expectations of firms’ approach to financial crime and sanctions risk management, with publications in the past year alone covering money mules, fraud, sanctions, PEPs and other common AML framework control failures. It’s important that firms keep up to date with all of these publications and use them as opportunities to see their own firm through the lens of the regulator. Consider each of the findings and check your own controls to see how you measure up.’
ABA, associations file lawsuit challenging CFPB cap on overdraft fees
12 December 2024
‘ “Overdraft protections meet the clear and definite market-based need for a safe, responsible, and easily understandable source of consumer liquidity,” Mississippi Bankers Association President and CEO Gordon Fellows said. “Overdraft services provide consumers with essential liquidity that can be the difference between putting food on the table or putting it back on the grocery store shelf. The CFPB’s new rule is a clear overreach of the bureau’s authority, and if allowed to stand it will result in Mississippians losing access to the liquidity that overdraft services provide.” ’
DORA and beyond: what do new compliance standards mean for banking and finance?
12 December 2024
‘The financial sector is entering a pivotal moment as it faces the full implementation of DORA by January 17, 2025. DORA focuses on digital operational resilience across financial institutions in the EU. The key goal – ensure these institutions are well-equipped to withstand, respond to, and recover from ICT disruptions. Given the recent figures, it is clear that regulatory shifts come at a significant cost and require substantial organizational changes (see Fig. 2). However, these regulation-related costs are minimal compared to the potential losses the industry could face without regulatory oversight.’
Hong Leong Bank reimagines branches for digital era
13 December 2024
‘The way Hong Leong Bank is looking at it, not all branches will be the same in the future. We’re actually in the process of rolling this out in our branch transformation program, where there are five categories. Category one is what we call iconic branches, where it’s going to be full-scale and full-service, where you have everything — from corporate banking, investment banking, to wealth management. Then there’s category two which we call a flagship branch, with a lot of services particularly focused on wealth management. Category three is a call-servicing branch and under category four, we have kiosks with virtual interactions and self-service kiosks. Category five are actually partnership models, where we partner with automotive dealers, property developers, even cinemas, to have some sort of presence in some locations.’
The invisible battlefield of financial innovation
11 December 2024
‘The rapid growth of APIs has reshaped financial services, but it has also created vulnerabilities that can no longer be ignored. These persistent challenges demand a proactive, forward-looking approach. By embedding security into the DNA of API management, fostering collaboration between teams, and learning from past mistakes, financial institutions can build robust defences against evolving threats. APIs are the backbone of tech and financial institutions are the backbone of funding future industry and economic growth – securing them is essential for innovation.’
The evolution of digital identity in financial services
11 December 2024
‘Open banking provider Plaid recently launched a new identity verification experience, “Verify once, verify everywhere,” which allows consumers to fast-track verifications across Plaid-powered apps, simplifying onboarding and reducing fraud while remaining KYC-compliant. This system has seen high success rates for many companies, significantly improving user acquisition and reducing onboarding friction and offering an improved user experience without compromising security. By leveraging open banking, Plaid can offer a seamless and efficient verification experience, reducing the need for users to repeatedly verify their identities across multiple Plaid-powered apps and services.’
OCC’s Hsu: Banks alone can’t solve fraud problem
12 December 2024
‘Banks and bank regulators can do more to address financial fraud, but they also need third parties such as social media platforms and telecommunications providers to do their part, Acting Comptroller of the Currency Michael Hsu said yesterday. During a speech on fraud, Hsu said many banks have already increased efforts to mitigate the problem, such as by providing customers with relevant information about trending scams and improving their fraud detection and monitoring systems. He also pointed to industry efforts such as the creation of the American Bankers Association’s Fraud Contact Directory and ABA’s partnership with the U.S. Postal Inspection Service to fight check fraud. Still, addressing fraud will require all stakeholders — from banks to social media platforms — “to each pull their weight and to act above and beyond what is currently legally required,” he said.’
Level 15, Newton Tower,
Sir William Newton Street,
Port Louis, Mauritius.
Tel: (230) 213 2390
Fax: (230) 213 0968
2024 © All Rights Reserved. Mauritius Bankers Association Limited