The introduction of mobile money services in Africa offers a huge opportunity for criminals to use these services to target victims in a variety of crimes as well as further allowing other forms of criminality. This rapid development of services combined with criminal opportunities, represents a security issue and poses a major challenge to law enforcement agencies in Africa.
The African continent has been considered as the ‘world leader’ in the mobile money industry, accounting for almost half of all registered mobile money accounts globally. Today, mobile money has grown in popularity across the African continent where some 153 mobile money services were operational in 45 African countries in 2018. For instance, in Sub Saharan countries more than 350 million mobile money accounts were registered in 2018 and the hence the value of transactions exchanged through these transactions were around USD 301 billion. Although mobile money has proven to be a positive influence for financial inclusion in many African countries, however, a more cash based informal economy can sometimes pose as even more serious challenges to law enforcement.
A report from the Law firm, DLA Piper states that the “mobile money system generally sits outside a country’s financial reporting system, making it almost impossible for authorities to monitor mobile money transactions.” As such, this emerging financial market is an attractive target for attackers and fraudsters. Most of the African countries with well-established mobile money service industries will be attractive to criminal networks across Africa and indeed the world, as a means to launder illicit profits. This is due to the availability of these services and the weak application of regulations in the industry.
According to ICA, International Compliance Association, $2 trillion is the amount of illicit money that is estimated to be laundered through financial institutions on a yearly basis. The worse thing is that financial crime seems to be increasing. Criminals are registering to multiple sim cards using personal data obtained from government sites, where Names, ID Numbers, and Date of Births are available. Using these information, a sim card can then be registered and loaded with illegally acquired money.
Using technology to help our fight through Financial Crime
Extensive monitoring through the use of technology is the main method being used by officials currently to combat financial crime. In order to put a stop to this, firms across all sectors need to review their internal processes to strengthen their services. As such, they will ensure that they are not being exploited. Artificial Intelligence, Machine Learning and Data Analysis are considered faster and cheaper to tackle financial crime and have also allow firms to adopt smarter approach.
Processes, such as transaction monitoring and transactions being conducted outside the account’s holder country of residence, which were typically slow and manual-oriented are now being carried out using AI and Machine learning, which have the capacity to scan huge amounts of data much faster than human.
Big data has allowed organisations to move away from to just tackling financial crime but also to start mapping out strings of transactions. Hence, making it easier for organisations to trace the original sources of illicit activity.
As we continue our fight against financial crime, companies need to equip themselves with the right technology to ensure that they remain compliant. Organisations which fail to recognize the importance of technology will remain vulnerable to criminals and disruptive companies alike.
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