SSA banks collaborate to combat crime

South Africa's National Treasury has launched the Regional Banking Dialogue for Sub-Saharan Africa, with a primary focus on combating crimes that impact the region's financial institutions in a cohesive manner. The treasury is also actively involved in rallying climate financing from COP27 to support South Africa's transition to a more sustainable economy. Ismail Momoniat, the Acting Director-General of the National Treasury, joined CNBC Africa to discuss the significance of this initiative. Momoniat highlighted the importance of addressing issues such as anti-money laundering and the financing of terrorism, which pose significant challenges to the banking sector. While the exact scale of the problem is difficult to quantify due to the secretive nature of these activities, it is a widespread issue affecting banking systems globally. The Regional Banking Dialogue, co-hosted with the US Treasury, aims to align with the regulatory standards set by correspondent banks, particularly those in the United States. Participants from various sub-Saharan countries, including Kenya, Tanzania, Zambia, and Mauritius, gathered to discuss best practices and enhance collaboration. During the dialogue, key risks such as money laundering, terrorist financing, cryptocurrency transactions, ransomware attacks, human trafficking, and drug trade were identified. Financial institutions are urged to implement robust controls to detect and report suspicious transactions promptly. By complying with international standards and strengthening regulatory enforcement, banks can mitigate these risks effectively. While the dialogue may not introduce new policy measures, it seeks to enhance compliance with existing regulations. Momoniat emphasized the importance of demonstrating adherence to regulatory requirements to avoid potential gray listing by international bodies. South Africa has taken significant steps to address deficiencies in its anti-money laundering framework and strengthen its legal framework to align with global standards. By proactively engaging with stakeholders and promoting regulatory compliance, the country aims to prevent any adverse actions such as gray listing. When addressing the potential threat of gray listing, Momoniat remained optimistic about South Africa's ability to avoid such a scenario. Through ongoing efforts to enhance regulatory oversight and implement necessary reforms, he believes that the country can demonstrate its commitment to combatting financial crimes effectively. While challenges persist, Momoniat expressed confidence in the measures taken to safeguard the integrity of the financial system and mitigate risks associated with illicit activities. In conclusion, the Regional Banking Dialogue serves as a platform for collaboration and knowledge-sharing among financial regulators and industry players in Sub-Saharan Africa. By fostering greater coordination and adherence to international standards, the region is better equipped to combat financial crimes and uphold the integrity of its banking sector. The dialogue underscores the importance of collective action in addressing complex challenges and promoting sustainable financial practices in the region.