Financial Crimes Rampant in Digital Age: Experts Urge Pakistan to Invest in Technology and Awareness
Pakistan is facing an uphill battle against the growing menace of financial crimes across the country. A recent conference on “Financial Crimes in the Digital Age” highlighted the need for the government, banking institutions, and customers to work together to combat this issue.
Investing in Technology and Awareness
Experts emphasized that banks must continue to upgrade their systems to strengthen data security for customers. This includes plugging loopholes in practices and mechanisms that make customer data accessible to white-collar criminals. Federal Banking Ombudsman Sirajuddin Aziz urged the government and banking institutions to invest in technological solutions to combat financial crimes.
The Need for Awareness
Aziz revealed that victims of financial crimes in Pakistan are often highly qualified individuals, while fraudsters are less educated but tactically adept at deceiving the public into obtaining their credentials to steal money from bank accounts. This highlights the urgent need for awareness among bankers and customers.
Asian Bank Accounts: A Hotbed for Fraud
Asian bank accounts have been frequently used for fraudulent activities as organized criminals exploit this facility’s ease due to banks’ negligence in complying with customer know-your-customer (KYC) requirements, experts noted.
Building a Culture of Awareness
Nadeem Hussain, chairman of Pakistan Fintech Network, stressed that banks must prioritize building a culture of awareness about data privacy within the system and then among customers. He emphasized the need for investments in technology and education to protect customer data, including OTPs, which are easily compromised due to their availability on the dark web.
The Fourth Industrial Revolution
Hazem Mulhim, founder and CEO of Eastnets, highlighted that the fourth industrial revolution is emerging worldwide, with Artificial Intelligence transforming every industry, including the financial sector. He estimated that financial institutions globally need Rs400 billion to revamp their systems through the acquisition of cybersecurity technology and workforce capacity building.
Regulatory Measures Not Enough
The banking regulator has imposed hefty penalties on financial institutions for failing to comply with regulations to prevent money loss at the hands of criminals, but regulatory measures are not enough to stop the menace. Pakistan is an emerging and important market for the financial sector, which must keep its system up-to-date with advanced technological solutions to maintain its position on the Financial Action Task Force (FATF) whitelist.
Coordinated Approach Needed
The conference also featured panel discussions on challenges in digital banking, banking compliance, and anti-money laundering, underscoring the need for a coordinated approach to combating financial crimes in Pakistan.
Key Takeaways
- Banks must invest in technological solutions to strengthen data security for customers
- Awareness among bankers and customers is crucial to preventing financial crimes
- The fourth industrial revolution is transforming the financial sector, requiring investments in cybersecurity technology and workforce capacity building
- Regulatory measures alone are not enough to combat financial crimes; a coordinated approach is needed