Nigel Holness presents at Anti-Fraud Seminar
Mrs. Stacey-Ann Escoe, Chair JBA Anti-Fraud Committee
Ms. Beverley East, Forensic Document Examiner
Ms. Stephnie Gordon, Director Customer Service, Passport, Immigration & Citizenship Agency (PICA)
Mr. Michael Gowie, Operations Manager, PICA
Ms. Deidre English Gosse, Chief Executive Officer, Registrar General Department
Ms. Daynia Harper, Public Relations Officer, Electoral Commission of Jamaica (ECJ)
Ladies and Gentlemen
I am very happy that we have decided to share, as professionals across various entities, information and ideas at this very timely seminar. Fraud does not only affect the banking industry, but it is a plague across many other sectors. It arises during elections, within the process of registering deaths and births, abuse of passports, and also in relation to taxes.
Banks are synonymous with the walls of Fort Knox or the CIA building because of the vast amount of security measures put in place to ensure the safety of our customers. But even with the exorbitant amount and type of security measures employed, there is always a loophole… or two. Loopholes that are always caught by unscrupulous persons and used to their advantage.
It is very real that we live in an age of fast pacers and everyone is on the go. As such, the industry had to “get with the program” as it were, and meet our customers on their time. With that need, came the need to introduce online banking platforms and services. A great move, but one that required us as an industry to tighten security measures even more. With the move towards rolling with the tide of technology, it became of utmost importance that we tightened the reigns on authenticating documents.
Thus became a term we all know, ‘KYC’; Know Your Customer. These norms and procedures were specifically designed to combat fraud.
IF followed correctly, KYC can control:
Collection and analysis of basic identity information
Name matching against lists of known parties
Determination of the customer’s risk in terms of propensity to commit money laundering, terrorist finance, or identity theft
Creation of an expectation of a customer’s transactional behavior
Monitoring of a customer’s transactions against their expected behavior and recorded profile as well as that of the customer’s peers
If we are to remain relevant, we will not be able to avoid the risks associated with technology, and in fact will need to embrace it even more in order to achieve the efficiency gains demanded by our customers. That is why it is extremely important that we know and seek to properly use all the KYC measures so as to mitigate against fraud.
It is also imperative that institutions thoroughly vet and cross examine potential employees, as the risk of fraud and collusion becomes extremely high if thorough investigations are not done. Ever so often we hear of incidences of collusion between employees, or an employee and a family member or friend to commit fraud.
We must also ensure that within our organizations, we conduct regular trainings; especially AML trainings, so that employees are constantly refreshed with the policies and guidelines that will prevent incidences of fraud.
We will never forget the most recent incidences of ATM fraud that had all the players in the industry on heightened alert and sent customers in a tailspin. I know many organizations began sending out safety tips every other day to inform their customers about the Do’s and Don’ts when making transactions online or at ATMs. However, after what we call the “9 day wonder”, the constant flood of information all but stopped. It is crucial that we constantly remind our customers about the dangers that exist and ensure that we all stay on the ball.
The challenge we have is that even while ensuring strict adherence to KYC and other anti-money laundering initiatives, our customers and the market still demands quick service and flexibility. This market push however should not cause us to compromise our standards and risk the consequences that could flow from inadequate AML procedures.
There is also the growing competitiveness landscape (from local and global players) that is also demanding lower transactions costs, even while we have high costs resulting from our need to implement AML and other regulatory standards. As a regulated company in Jamaica, we also face higher tax rates and one of the lowest Return on Capital rates in Jamaica.
It is this contradiction that will challenge us moving forward as an industry, and as individual institutions.
To overcome this, we have to continue our consultation as an industry with government and other stakeholders and constantly innovate. This demands that as an industry we remain alert and work together on our common areas of interest.
I am confident that we can continue to find better ways, and in fact maybe it is because of these challenges we constantly face why the Banking sector is one of the most innovative in Jamaica.
I would like to thank the representatives from these organizations for coming to share with us what is happening in their areas and how we can be more vigilant as gatekeepers. Our customers and clients look to us for solutions and we have a duty to ensure that we seek to be as informed and as proactive as possible so that we keep our clients’ information, money and assets in safe hands.
I hope that the information that will be shared today will be beneficial to all and that we will be able to grasp something from the various presenters.
Jamaica Bankers Association