Data Encryption Matters – How Treasury Plans to Get SA off the Grey List

National treasury has announced a raft of changes to SA banking legislation, in order to comply with international requirements and remove the country from the Financial Action Task Force (FATF) grey list.

In February 2023, FATF placed South Africa on a list of countries that includes Jamaica, Morocco, Barbados, and the UAE, citing problems with the local banking industry’s measures to combat money laundering and terrorist financing.

This decision could have a potentially huge impact on the economy and even prevent foreign funds from investing in the long-term.

In response to the decision, the SA government has announced a variety of changes to the law, especially where personal and commercial financial services are concerned, and this is sure to have an impact on the data security industry.

Banks set to share more financial data than ever

One of the biggest changes to the South African banking landscape in the wake of greylisting will be enhanced sharing of financial information between banks and other institutions.

This is designed to identify illicit transactions since criminals tend to have multiple bank accounts when carrying out money laundering activities and linking them to their true owners is the first step in combating these crimes.

From a cybersecurity point of view, this essential measure presents a huge challenge in terms of securing privacy and personal data.

• Some banks still use outdated, mainframe computers with software that is several decades old. These will need to be updated to ensure compatibility with cybersecurity measures.
• The flow of sensitive information between banks could create the potential for massive data leaks, breaches, and hacking attempts, which could see crucial financial information falling into the hands of cybercriminals.

Data encryption is essential as financial information flows rapidly

Before SA can leave the grey list, we expect the naming industry to revamp its IT policies and embrace encrypted cloud security solutions as an industry best practice.

While banking customers can’t fully control the way their institutions share information, there certainly are things that can be done to protect your personal financial data online.

Soteria’s range of secure cloud storage packages offers an easy solution for your data security needs. Choose the option that suits your business, budget, and storage requirements today for total peace of mind.