The Bank of Ghana (BoG) has issued a directive to banks in the country, instructing them to strengthen their fraud management functions. This move aims to prevent, detect, and deter fraudulent activities within the banking sector. According to the BoG, the directive is a response to concerns raised by the Ghana Association of Banks regarding the varying ways banks currently position their fraud functions.
Governor of the BoG, Dr. Johnson Asiama, emphasized that fraud is a significant risk that requires serious attention from the banking sector. He stated that the fraud function should be appropriately positioned with direct and unrestricted access to the managing director or chief executive officer. This arrangement is necessary to ensure the independence and effectiveness of fraud management functions within banks.
The BoG has also directed banks to ensure that personnel responsible for fraud management have the requisite skills, professional certifications, and technical competence. This move is part of the central bank's efforts to intensify its supervisory focus on risks emerging from the growing digitalization of financial services. The BoG is also paying increased attention to cyber technology and fintech-related risks.
Dr. Asiama noted that while digitalization has delivered significant benefits to the financial sector, it has also increased operational and cyber risks. The central bank is working with the industry on the implementation of the Cyber and Information Security Directive and will strengthen supervisory expectations around technology, customer-fund safeguarding, and third-party risks.
The directive is aimed at ensuring that banks have effective policies and controls in place to prevent, detect, and deter fraudulent activities. The BoG's move is also expected to enhance the overall stability and security of the financial system. Banks are expected to implement the directive and report back to the BoG on their progress.
The Ghana Association of Banks has welcomed the directive, recognizing the importance of strengthening fraud management functions in the banking sector. The association has pledged to work with its member banks to ensure that they comply with the BoG's directive. The move is expected to have a positive impact on the banking sector and the economy as a whole.
The BoG's directive is part of its efforts to maintain the stability and security of the financial system. The central bank has been working to enhance its regulatory framework and supervisory capacity to address emerging risks in the financial sector. The directive on fraud management functions is a key part of this effort.
Key points
- Banks must give fraud units direct access to CEOs
- BoG intensifies supervisory focus on cyber technology and fintech-related risks
- Directive aims to prevent, detect, and deter fraudulent activities within the banking sector
