Page 47 - Capricorn IAR 2020

Financial and cybercrime
Financial crime refers to crimes committed with the purpose of converting ownership of property in an unlawful manner for someone’s own personal benefit. Cybercrime on the other hand refers to a method of committing crime using a computer and network for one or more purposes including financial crime. Money laundering is one of the most serious forms of financial crime.
An increase in cyber-related crimes was evident during the COVID-19 pandemic as part of a growing threat internationally, due to increased use of personal devices and remote working infrastructure which created or increased certain vulnerabilities. Continuous assessment, monitoring and security improvements are required to protect data and assets.
According to the Bank of Namibia’s Economic Outlook Update from April 2020, the amount of fraud perpetrated through various payment streams is increasing. The scale and complexity of financial and cybercrime is rising, which jeopardises the stability and security of the financial services system.
Namibia is among the most exposed countries to cybercrimes. This is mostly attributed to a lack of regulations, laws and policies dealing with cyber-related crimes, malware attacks, vishing (voice phishing) and social engineering-related crimes which have, as a consequence increased significantly.
Our banks use international systems that support the processing of financial intelligence information, analyse large volumes of data and report suspicious money transactions.
In the risk report, we explain how we approach technology risk through cybersecurity. Salient features in improving cybersecurity and addressing cybercrime include:
• Internal and external awareness campaigns assisted in higher vigilance
• An Information Classification Framework was approved by the Capricorn Group risk committee in
February 2020
• Risk practitioners collaborated across subsidiaries and with industry stakeholders to share knowledge
and practices
On a global scale, the Financial Action Task Force (“FATF”) tests anti-money laundering (“AML”), Combating
the Financing of Terrorism (“CFT”) and Counter-Proliferation Financing (“CPF”) capabilities per country against a set of standards. Namibia is scheduled for the 2020/21 FATF/ Southern African Anti-Money Laundering Group (“ESAAMLG“) mutual evaluation later this year. The off-site desk review commenced, and the on-site visit will be conducted in November 2020. The draft report will be discussed by ESAAMLG in September 2021.
The mutual evaluation will focus on the following:
• Namibia’s AML/CFT/CPF system and its effectiveness
• The implementation of said system to ensure risk exposure is effectively identified, assessed, understood,
addressed and mitigated
• An assessment of whether the key objectives of the national AML/CFT/CPF system has been achieved,
the financial system and broader economy is protected from related threats, financial sector integrity is strengthened and contributes to overall safety and security
Gross Losses due to financial crime decreased to N$2.7 million (2019: N$2.8 million) while net losses decreased to N$2 million (2019: N$2.8 million).
STAKEHOLDERS THAT HAVE AN INTEREST IN THIS MATTER
Customers
Government and regulators
Shareholders
2020 INTEGRATED ANNUAL REPORT
RELATED STRATEGIC CHOICES
Building our foundation
Win through operational excellence
RELEVANT PRINCIPAL RISK
Technology
Reputation
Operations (“GBITC”) Compliance
People
BOARD OVERSIGHT
Group board information
technology committee
Risk report from page 69
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