Financial services industry asked to boost risk controls
What you need to know:
Reason. Robust security controls that match innovative delivery channels being rolled out should be put in place.
The financial services industry needs to strengthen its risk management systems and controls as they rollout innovative products to ensure business sustainability and boost customer confidence in the industry.
Speaking ahead of the sixth Banking, Finance and Insurance expo slated for March 20, at the Uganda Manufacturers Association showground, RoyalWay Media chief executive officer, Mr David Sempala, said risk management has emerged as one of the new threats to the financial services sector. Therefore, it needs to create robust risk frameworks and clearly define risk appetites and reporting in order to anchor decision making.
According to a Deloitte 2013 Financial Crimes Survey report, Uganda’s financial services industry loses between $1 million (Shs2.4 billion) and $10 million (Shs24.9 billion) to fraud annually, necessitating industry players to put in place robust security controls that match the innovative delivery channels being rolled out to curb fraud.
The three-day Banking, Finance and Insurance Expo seeks to present a platform for public financial capabilities.
Mr Sempala added: “Financial institutions may change corporate governance and take a larger leap to new innovation while their customers lag behind in technology and other financial information which results in risks, thus, the need to bridge this gap through such expos.”
Despite an increase in the population using formal financial services last year, the banking industry still grapples with low levels of the banked population due to, among others, low financial literacy levels and lack of trust in the financial services industry.
The 2013 FinScope survey indicates that while the adult population using formal financial service institutions increased by two fold from 28 per cent in 2009 to 54 per cent last year, only 20 per cent of Ugandans (about 3.4 million people) have bank accounts.