Community

A tiny amount of fraud, but it is the police who are bearing the cost of the investigation. They should have been better consulted. Ultimately though, the police ought to be happy that the amount of cash in the community is being reduced. 

The good news is there is a solution for the paranoid... a tin foil wallet! 

This is a great idea for social events- be they weekends away, or a night on the town.  I remember from many years ago, the norm with a group of lads on a night out was to have a kitty - everyone would put in the same amount of money at the start of the night, then expenses (mostly drinks, but also taxis, food, etc) would get taken out of it. This was much easier than expecting people to buy rounds - someone always skived out, someone always ended up buying more expensive drinks. The kitty is very democratic!

Some mobile services, including MTN Uganda, will allow you to send money to an unregistered phone number. This money can then be claimed at an agent. If it is not claimed, it will remain in a suspense account. 

From here, poor controls and a lack of processes for users to redeem the unclaimed funds created the opportunity for fraud.  

The technology may be new, but the scams and exploits remain the same. Manipulation of suspense accounts is one of the oldest tricks in the book for internal fraud, and suspense account reconciliation should be one of the first items on any internal control checklist or risk management plan.

Banks have known this for a long time, and hopefully it won't take mobile-led operators long to figure this out. Many operators spend a lot of time worrying about their regulators, when it's actually their own internal control environments that they should be worried about.

I agree that consumers aren't comparing banks to other banks anymore. They see how much technology has advanced and wonder why using their bank isn't as easy as using Amazon, or Gmail, or an iPhone.

But it's not regulation that's holding the banks back! Banks will always use regulation as their first excuse for not taking action, followed closely by blaming their legacy systems. I don't believe there is one single bit of regulation anywhere in the developed world that really gives the banks a reason to stop innovating. Sure, they have privacy regulations that Facebook and Google don't have to contend with, but a smart bank can treat its customers fairly and bring the benefit of their data to the customer in terms of personalisation and ease of use.