The Use and Regulation of Mobile Money as a Tool to Combat Money Laundering in South African Banking Institutions

Abstract

The emergence of mobile money in South Africa has robustly brought a continuous faith that financial inclusion will be widened in the country and that even indigent people from very remote areas shall be able to enjoy access to financial services like many others. Notably, the emergence of mobile money not only provides a greater advantage of financial inclusion and access but also poses some financial risks to money laundering, financial terrorism, and other related crimes. Thus, it is paramount that the use of mobile money is regulated in an effort to combat any occurrence of financial criminal activity, particularly, money laundering. In terms of the Financial Intelligence Centre Act 38 of 2001, as amended (FICA), mobile money is indirectly regulated in the sense that FICA makes provision for the regulation and adoption of legal mechanisms that shall assist in combating money laundering from all financial sites. However, there is still no legislation that strictly and solely deals with mobile money in the country, thus the country and its banking institutions have to rely on Banks Act, FICA, the Financial Action Task Force (FATF), FATF Recommendations and other regulations in order understand and monitor regulation of mobile money using advanced and complicated technological devices against money laundering. South Africa makes little or no reports on the risks associated with the use of mobile money which then burdens the legislature and policymakers to be able to create laws that will forcefully assist in combating money laundering, this could be due to the complexity and ever-evolving of technology which makings it a bit difficult to understand the changing digital trends and have a stable and concrete legislation at the same time to ensure financial integrity.