Financial Crime World

Mauritius Banking Sector Faces Risks and Vulnerabilities

A recent report by Oliver Wyman, in collaboration with the Bank of Mauritius and the Mauritius Bankers Association Limited (MBA), has highlighted the challenges facing the banking sector in Mauritius. The report was presented to the Prime Minister and the Minister of Finance, Economic Planning and Development on September 8, 2022.

Strengths and Challenges

The report notes that the global financial landscape is undergoing unprecedented disruptions, requiring significant adaptation and change from International Financial Centres (IFCs) like Mauritius. While the Mauritian banking sector has several strengths, including its business-friendly economy and stable environment, it also faces several challenges and threats that must be addressed to maintain its position as an attractive IFC.

Future of Banking in Mauritius

Five core themes have been identified to shape the future of the banking sector in Mauritius:

  • A Cash-Lite Society: Encouraging digital payments and reducing cash transactions
  • Improved Services for Customers through FinTechs: Leveraging technology to enhance customer experiences
  • Enhanced Offerings for Small and Medium-Sized Enterprises (SMEs): Providing tailored financial solutions for SMEs
  • Leading Digital and Innovation Hub: Fostering innovation and digital transformation in the banking sector
  • Treasury Solutions for Cross-Border Investments, Trade Finance, and Private Banking: Offering specialized services for international clients

International Vision

The report outlines an international vision for the future role of the Mauritian banking sector:

  • Delivering best-in-class services to African and Asian customers
  • Acting as a bridge connecting the rest of the world to Africa
  • Prioritizing 12 tangible initiatives, including:
    • Accelerating the transition to a cash-lite society
    • Developing a unique value proposition for global business positioning
    • Strengthening the fundamentals of the banking sector

Risks and Vulnerabilities

Despite these efforts, the report warns that the Mauritian banking sector is not immune to risks and vulnerabilities:

  • Cash payment limitation reduction
  • Financial literacy campaign
  • Regional Treasury Centre incentive scheme
  • Cross-bank digital trade finance platform
  • New private banking business model
  • Banking sector ESG strategy
  • Virtual assets and distributed ledger technology adoption
  • Reinforced MIFC branding, accountability, and strong promotion arm
  • MIFC banking training centre
  • Centre of excellence for banking in Africa including ESG
  • Reinvigorated economic diplomacy
  • Clearer expatriate value proposition

Conclusion

The report concludes that the Mauritian banking sector must address these risks and vulnerabilities to ensure its continued growth and success.