On a recent visit to South Africa, Financial Crime News was delighted to meet with Nic Swingler Head Financial Crime Compliance at Absa Group Limited, who in an interview discussed the fight against financial crime on the African continent and in South Africa in particular.
FCN: How did you come into your current role?
NS: I am not a Financial Crime “lifer” and this role was not really part of my early career planning! Previously I was the COO for our Corporate & Investment Bank. The front line experience I gained over many years as well as direct exposure to products, operations, technology platforms and data were amongst the key attributes required to enable and deliver a high quality risk management capability across Financial Crime Compliance. Having said this, I am really enjoying the challenges in this role and have not looked back since making the move to Financial Crime Compliance in 2016.
FCN: Tell us a bit more about Absa?
NS: Absa Group Limited is listed on the Johannesburg Stock Exchange and is one of Africa’s largest diversified financial services groups with a presence in 12 countries across the continent and around 41,000 employees. We own majority stakes in banks in Botswana, Ghana, Kenya, Mauritius, Mozambique, the Seychelles, South Africa, Tanzania, Uganda and Zambia. We have launched our international presence in London operating as Absa Securities UK and we are pursuing a corporate strategy to procure licenses in the United States.
Absa was founded in the early 1990’s through the merger of a number of South African financial service providers. the holding company was known as Amalgamated Banks of South Africa but in the early years of this union, each bank operated under its own name. in the late 1990’s they were fused into one single brand and a new corporate identity was adopted as well as a name change to Absa Group Limited. In 2005 Barclays PLC purchased a majority stake in Absa and we were part of the Barclays Group until 2017 when they reduced their investment to a minority stake.
FCN: What are the Financial Crime Challenges you face in South Africa and across the Region?
NS: If I were to pick 3, these would be collaboration, enforcement and people.
- Collaboration is a key challenge. We need to look at public/private collaboration in order to become more effective in fighting financial crime. Currently sharing is mostly on a bilateral and ad hoc basis. The benefits of formal information sharing partnerships such as the UK’s JMLIT, Australia’s Fintel Alliance or consortia using the US Patriot Act 314 (b) are clear and proven many times over. South Africa is working on establishing a framework for a partnership, Botswana and Kenya are also looking at establishing partnerships between public and private sector. It would be a significant boost in the fight against financial crime if Financial Information Sharing Partnerships (FISP’s) could be established in more of our countries across the continent, where we operate, and Absa is certainly ready and willing to contribute.
- Another challenge is the need for a truly effective enforcement capability, delivering prosecutions and convictions and seizures of financial assets to generate actual consequences for committing serious crimes which as we know act as a significant deterrent to would-be criminals. A challenge we face in South Africa and across the region is that there has been limited success in achieving these necessary outcomes. In saying that, this appears to be a challenge also beyond the continent and a reason to ask the hard questions around how the system can become more effective.
- On the people side, whilst we are fortunate to have an experienced talent pool at Absa dedicated to fighting financial crime, as we have grown we have seen limited availability with the skills we need. The skills requirements have changed over recent years and a lot of investment is going into training and developing the required skills to manage Financial Crime risks. For example, we established a Financial Crime Academy a couple of years ago and partnered with an external provider to develop deep subject matter skills to our teams across all locations.
FCN: What opportunities do you see to improve the effectiveness of the fight against Financial Crime?
NS: As mentioned earlier, collaboration across the public and private sector is key to improving effectiveness and the establishment of FISP’s or similar structures will definitely be beneficial. In a similar vein, collaboration across areas such as fraud, cyber and financial crime will also improve effectiveness. Historically these areas have been structured and managed on a separated or standalone basis but there are many benefits from sharing and leveraging these skills in a more joined up manner. There are also further opportunities to improve effectiveness through deployment of data analytics, behavioural analysis and AI.
FCN: Is South Africa ready for the FATF Mutual Evaluation?
NS: We are currently in the midst of a FAFT evaluation in South Africa. The Country has made significant progress in its fight against financial crime and the amended Financial Intelligence Centre Act came into force last year. This will put us in a good position to demonstrate Technical Compliance, however, I think the key question we will be left with is demonstrating the level of Effectiveness and whether or not that compares well with other evaluations already completed.
African Countries evaluated to date have not fared well on both technical compliance and effectiveness. Whilst the South African results will certainly improve the continents overall scores, there will be some areas for further improvement, for example I already mentioned both increased collaboration and improved outcomes, which incidentally are complimentary.
FCN: Why no National Risk Assessment? – What would it say?
NS: I think the requirement for and value of having a comprehensive understanding and assessment of risks and threats is recognized and supported. From our point of view it will definitely enable a more effective risk based approach to fighting financial crime. I think it’s more a matter of timing, so hopefully we will see one published in the near future. some of the risks we are focussing on include illicit cross border financial flows, corruption, investment scheme fraud and environmental crimes which includes illegal wildlife trafficking.
FCN: Which Country in Africa will be first do you think to set up a FISP? – Kenya, Botswana, Nigeria or South Africa?
NS: South Africa is close to finalising our FISP framework. My money is on
South Africa but the race is not over yet. Also perhaps what’s more important than being first is to make sure it is well thought out, that the learnings from other FISPs are taken and the right people and organisations are represented. Being first isn’t insignificant but being effective is much more important.
FCN – Is Cyber Crime a concern also in South Africa?
NS: Definitely, fighting and mitigating cybercrime is a top priority for Financial Institutions in South Africa. Also the link between Cyber and Financial Crime has become an area of focus – breaking down silos and driving for greater collaboration and sharing of information across the teams. There is much we can learn from the data we gather from cyber threats/attempts/events which can be used to be more effective at managing financial crime risks.
FCN: What skills do you look for in your financial crime fighters – has this changed over the years – is it changing?
NS: The required skills have definitely changed – away from process and “tick box” to risk management type skills – connecting dots, applying judgment, challenging, thinking differently as opposed to reaching a conclusion by following a predefined process. We are also bringing in new skills in areas such as data analytics and behavioural and network analysis.
FCN: What kinds of collaboration is there across the Banks in South Africa and the Region on fighting financial crime?
NS: We have industry association bodies in most of the countries where we have a presence such as the Banking Association of South Africa, The South African Banking Risk Information Centre and the Kenya Bankers Association to name three. These industry bodies are key to ensure close collaboration amongst banks in determining common threats and agreeing common standards in the fight against Financial Crime.
Still I do think there is an opportunity for those of us fighting financial crime across the continent where criminals don’t respect borders, that whilst we do we could improve collaboration.
Nic Swingler is the Head of Financial Crime Compliance for Absa Group Limited and is responsible for the implementation and delivery of an effective Financial Crime risk management strategy and policy framework across the group.
He joined Absa in 2007 and over the years held various roles within the Corporate and Investment Bank (CIB). Prior to joining Financial Crime, he was the Chief Operating Officer for CIB.
Nic is a seasoned banker with over 20 years of experience in Financial Services. This includes working in London for 11 years, 7 of which at JP Morgan