Financial Crime World

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Mauritius’ Banking Sector Must Prioritize Compliance and Risk Management Amid Growing Financial Crime Threat

The World Economic Forum’s 2018 report revealed that fraud and financial crime has become a trillion-dollar industry, with private companies spending approximately US$8.2 billion on anti-money laundering (AML) controls alone in 2017. According to the Association of Certified Fraud Examiners’ global report on occupational fraud, organisations typically lose 5% of their annual revenue to fraud every year.

Fraud by Numbers

PwC’s 2020 Global Economic Crime and Fraud Survey found that:

  • Half of respondents experienced some form of economic crime or fraud in the recent past.
  • The top four instances of fraud identified were:
    • Customer Fraud
    • Cybercrime
    • Asset Misappropriation
    • Bribery and Corruption
  • As many as 47% of companies experienced a fraud in the past 24 months with an average of six frauds reported per company.

Combatting Financial Crimes in Mauritius

Mauritius has recently been added to the Financial Action Task Force’s (FATF) list of jurisdictions under increased monitoring, citing deficiencies in its regime to counter money laundering, terrorist financing, and proliferation financing. The Bank of Mauritius and the Financial Services Commission have issued new guidelines for regulated entities.

The Case for Integrated Financial Crime Risk Management

In light of the increasing complexity of financial services, businesses face more unexpected events and have less time to respond to them. With the globalisation trend and interdependency of different types of risks, it is essential to adopt an integrated approach to financial crime risk management.

How Can We Get It Right?

To effectively manage financial crime risks, organisations must:

  • Identify and authenticate customers
  • Monitor and detect suspicious behaviour
  • Take action in response to potential threats

A holistic view of governance, risk management frameworks, and processes can simplify operations and improve customer experience. By adopting a more integrated approach, financial institutions in Mauritius can create an efficient and cost-effective operating model for managing risks.

The Need for Compliance

As the banking sector in Mauritius navigates the complexities of compliance and risk management, it is essential to prioritize these efforts. With the increasing threat of financial crime, it is crucial that banks adopt a more integrated approach to managing risks and prevent financial loss.