Economic, geopolitical risks present worldwide: BSP

Photo: BSP Financial Group Limited

The world is continuing to present economic and geopolitical risks that impact almost every country, a bank executive says.

Bank South Pacific Financial Group Limited (BSP) Chief Executive Officer Mark Robinson said during the BSP annual general meeting in Port Moresby on Friday that this included higher inflation, particularly for energy and food, and generally more volatile markets generally.

“Our region is certainly no exception,” he said.

“We must navigate this environment by exercising prudent risk management and ensuring our balance sheet remains strong.”

“In short, we have a responsibility for BSP to be prepared to weather any storm, including these inevitable global economic cycles, which impact our region.”

BSP Chairman, Robert Bradshaw added that the Pacific was exciting with a rich history, strong economic fundamentals and trade and other links between countries in the area and with countries outside.

“Of course, this region is attracting more attention these days from countries beyond the Pacific,” he said.

“Over the past several years, BSP has been operating against an economic backdrop that has been impacted by global supply chain constraints, high inflation, natural disasters and a global pandemic that affected key industries.

“Donor support was provided towards disaster and pandemic recovery efforts as well as for bridging fiscal shortfalls for the Pacific nations in the aftermath of the pandemic.

“BSP has remained strong throughout this period with solid profitability and with our total assets increasing to a record K34 billion (US$9.6 billion) at year-end 2022.”

Bradshaw said PNG’s natural resources projects would be a strong driver of the economy over the next 10-plus years.

“These projects represent opportunities for investment activity in the medium term and provide the impetus for broader economic activity and a solid foundation for long-term growth,” he said.

Meanwhile, financial institutions and banks in the country must be serious about addressing cyber security threats, an expert says.

Ramesh Chinnaraj, a senior research paper contributor, said some companies were serious about cyber threats and the recent hacking incidents on major financial institutions and companies had heightened and has raised a lot of awareness. The cybercrimes taking place these days not only affect bank customers but also impacts the banks themselves,” he said. This is especially true when the banks try to recover their data.

Banks will have to spend a lot of money in recovering the information or data. Taking strong cyber-security measures is necessary for the banks because data breaches effect customer privacy and makes it difficult to trust the institution in the future, damaging its brand reputation.

When you have implemented strong cyber security in digital banking, it will ensure that the sensitive data is secure.

“If it is revealed, there are several issues likely to occur such as fraud.

“It may cause financial losses and mental stress on customers,” Chinnaraj said. He said there were challenges identified that the financial and banking industry needed to respond to improve digital user experience, improving digital onboarding and improving response to new technologies.

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