Financial institutions must respond to the demands of the market as they are operating in a very dynamic, competitive and challenging environment, said Kenneth Matambo, the Minister of Finance and development planning.
Matambo said the business world is now changing much faster than at any point in the past.
“The ever increasing commercialisations, advances in technology, globalisation and changing profile of customers have an influence on the institutions operations,” he said. “As sophisticated technologies are adopted for executing financial transactions criminals are also devising new more complex approaches in perpetrating fraud.”
Fraudsters have adapted to use skimming, hacking and phishing techniques to gain fraudulent access to the accounts of unsuspecting bank customers.
Lately, financial institutions have been contending with money laundering issues and possible links with terrorist financing abroad. “The fraudsters are not only individuals in the country but also partners in sophisticated internal and external organized crime syndicates,” said Matambo.
A successful fraud on any bank is overwhelming in terms of immediate financial impact as well as loss of customer confidence.
“Types of financial fraud have widened beyond traditional banking sector to many other sectors,” he added.
Matambo said that due to globalization, local companies and industries are now finding themselves faced with global competitors. However these developments also heighten risks to which consumers of financial services are exposed.
Meanwhile government continues to make concerted effort to ensure stability not only in banking sector but financial sector as a whole. Matambo said these efforts include establishment of the financial intelligence agency, the ongoing review of the Proceeds of Serious Crime Act and drafting of Anti Terrorism Bill with the view to tackling issues of financial crime and financing terrorism.
Matambo said the ministry is also working on the financial sector development strategy that will facilitate growth of the financial sector consistent with expanding and more sophisticated needs of the economy.