Ushma Modi
A few words on fraud and its control at Absa Bank
How does Absa respond to cases of fraud in Mozambique?
Absa Bank Moçambique, like our Group as a whole, has zero tolerance for fraud. At Absa we treat fraud very strictly and ensure that our policies and procedures are designed to support our commitment to our clients and to society. More than responding to cases of fraud, our greatest concern is preventing them, which is a continuous and dynamic exercise, keeping pace with the development of the various products, technologies, systems and processes globally, as well as the new fraud trends that accompany them. We believe this approach allows us to minimise the impact of fraud as far as possible, both on ourselves and on our clients, since fraudsters are increasingly specialised and use advanced techniques that, in some circumstances, allow them to be one step ahead. We have specialists in our teams, both locally and at Group level, who support us in identifying, preventing and handling fraud. Because we are part of a Pan-African Group, we have the privilege of knowing various realities and exchanging experiences and practices from different geographies, which gives us greater robustness on this and other matters.
This subject is of the utmost importance to us and, for that reason, we have worked with the different key players in the financial sector: our Regulator, the Mozambican Banking Association and the other financial institutions, in order to contribute positively to the prevention and mitigation of fraud risk in the financial sector.
What is the basic advice for citizens to avoid becoming victims of fraud?
We know that, in a globalised world like today's, with technological advances, social networks and the countless online services available, we end up easily handing over our personal data to the various platforms and apps, which are for the most part non-banking services, and this opens a bigger window for fraud. Each of us has an important role to play here in preventing, detecting and reducing this risk. It is extremely important that we are more attentive and vigilant about the information we share on social networks and on the various digital platforms, whether for payments, games, entertainment, services or other purposes. In addition, in connection with this ever-growing increase in the use of digital media, the importance of always paying attention to data privacy policies, as well as to the authenticity of apps, is often neglected; in some circumstances this leads us to realise that we are dealing with a fraudulent application and/or an attempted fraud. With the aim of contributing to raising awareness of fraud on an ongoing basis, we have been sharing with our clients, employees and the general public various prevention tips and/or possible warning signs so that they are always attentive and vigilant, advising on everything from keeping their data and access codes secure to new trends, such as Mule accounts, for example. Last but not least, we reiterate the importance of the role each person plays in reporting possible attempts at fraud, which must be reported immediately to the Bank or to another entity, where applicable.
“Absa believes that financial literacy has a fundamental role in mitigating the risk of fraud”
- Ushma Modi
How does financial fraud affect the banking sector? And the market?
The impact of fraud risk is severe and can be fatal for a financial institution and, depending on the magnitude and/or the role the institution plays in the market, the echo may be felt with greater or lesser impact in the financial sector and in the market in general. Besides the negative financial impacts that fraud brings to the sector or an institution, it brings with it reputational, legal and criminal impacts, which are by no means less important, as they generate distrust and discredit among the various stakeholders, including, on the one hand, clients and potential clients, putting their deposits and the performance of products and businesses at risk, as well as the uptake of new products and new business, and, on the other hand, the regulator itself, since it can lead to fines, temporary suspensions of activity and, in extreme cases, loss of operating licences. For the sustained growth of the economy, an efficient financial system is essential and, since it plays a role in driving the investment process by acting as a provider of credit, financial intermediation is considered its backbone. That said, any impact on this sector, or specifically on banking, could compromise or slow the development of an economy and, in extreme scenarios, even cause its collapse.
How can financial literacy help to combat this problem?
The importance of knowing how to manage our finances well is crucial and means that we are better prepared when we face important investment or financing decisions. Absa believes that financial literacy plays a leading role in mitigating the risk of fraud, because it goes beyond passing on knowledge about the products and services that banks offer, and includes an educational component on what each of these represents, offers and how it should be handled throughout its life cycle. Mastery of this modus operandi prompts a state of alertness when deviant behaviour becomes apparent. One of the biggest challenges lies precisely in the component of financial literacy, and now also digital literacy, which falls short of the desired levels in the country, leaving our society more vulnerable to the risk of fraud.
As part of our commitment to narrowing this gap, we have been promoting various initiatives, such as sharing financial literacy manuals, thematic debates in our E-series, and publishing tips and raising awareness among clients on social media and on our website. We take this opportunity to invite all readers of this magazine to invest a little of their time in improving this knowledge, always staying up to date on the forms of fraud that emerge, and reducing their vulnerability to this risk. The security of our clients is our greatest concern and, for that reason, we will continue to carry out the actions within our reach to reduce the vulnerability to fraud risk of our clients, our business and society in general.
