Transition for Tunisia
Tunisia is in a state of transition for many reasons.
Following the Arab Spring and the fall of authoritarian president Zine el-Abidine Ben Ali, the country is mid-recovery and coming around. The banking sector is recovering by focusing on security, particularly against money laundering.
Following the ousting of President Ben Ali, a few crucial facts of Tunisia’s financial sector came to light. The most crucial of these was the poor health of the three major state banks, Societe Tunisienne de Banque, Banque de l’Habitat and Banque nationale agricole.
This led to two of the major banks receiving a bailout of over $440m (TND867m) in August 2015, a move not well received by the population. In addition, the IMF and the World Bank both provided emergency loans, valued at $300m and $500m respectively, in the hope of restructuring the state banks.
As a whole, the region was in need of improvement after the Arab Spring. Such a massive amount of upheaval in the area, including in countries such as Algeria and Libya, obviously resulted in upheaval to the financial sector. One of the biggest issues was money laundering.
How big is this problem?
SIBTEL, the provider of the interbank electronic clearance system in Tunisia, has partnered with FICO TONBELLER to implement its anti-money laundering (AML) technology at four banks (STUSID bank, Banque Tuniso-Lybienne, Banque de Tunisie et des Emirats and Qatar National Bank).
Following a successful pilot period, the Central Bank of Tunisia and the Tunisian Association of Banks is extending the project across the country.
How necessary was this implementation? As it turns out, it was crucial.
Gerhard Hess, regional sales director for compliance solution in the Middle East and Africa at FICO, tells RBI: “The [money laundering] problem was big because we have Libya beside us. Libya is in the middle of a war and trying to get a new government.
“Therefore, there was a lot of cash through the borders to Tunisia and Algeria; they brought in a lot of cash which, from my point of view, is laundered money. This has been a problem for the last two years.”
Torsten Mayer, vice president at FICO, explains further: “Before, there was nothing. There was no system implemented and, in Tunisia, after the revolution four years ago, the Tunisian government started an initiative to catch up with global regulations and for the country to become compliant with regulation.
“We did this for many reasons; to become a reliable country for investors and to achieve our banks’ acceptance by other banks globally. It’s one initiative to make Tunisia a reliable and sustainable location for any kind of investment or business.”
So this was a much-needed development for security in the Tunisian financial sector, but has it been successful. Hess certainly believes that to be the case and everyone in the country has come together to make it happen.
He says: “It’s currently with five banks. Historically, they has a poor filtering solution for foreign transactions and, in 2010, they were forced to have something in place. They had no transaction monitoring or KYC and so on. There was a lot of pressure to get systems in place.
“From this point of view, we started working with a banking association and 21 banks in Tunisia to build a community around a solution. We found this SIBTEL company that can host for smaller banks. We started with five banks with more hopefully following.”