The Attorney’s Fidelity Fund, a statutory body established and regulated by the provisions of the Attorneys Act of 1979, sends regular Risk Alert Bulletins to practitioners to keep them abreast of important developments in the law (particularly with regard to risk management).
This bulletin illustrates, among other aspects, the areas of practice most prone to fraud and hence, resultant claims against the Fund.
In the past, the conveyancing industry was seldom subjected to such claims. However, this is no longer the case, and conveyancing claims now form a substantial part of the risk profile of the Fund.
With this as context, Korbitec was approached by Absa to investigate methods for improving security measures related to the issuing, payment and requesting of guarantees. This process has remained largely unchanged over the last two to three decades and the monitoring of issued guarantees, as well as the managing and monitoring of signatories of guarantees, have long been problematic.
The time has therefore come for this process to be largely automated and embedded in a secure electronic environment.
The newly established Absa Guarantee Hub combines Absa’s requirements for a secure, transparent and traceable platform for issuing electronic guarantees, and the existing process that exists between transfer and bond attorneys.
Korbitec spoke to Dawid Malan, Head: Strategic Stakeholder Engagement at Absa Home Loans; and Michelle Ramdeen, National Manager: Attorney Panel at Absa Home Loans to highlight the history, roll-out and future prospects of the Absa Guarantee Hub.
GUARANTEE HUB INTERVIEW (Q & A with Michelle Ramdeen and Dawid Malan, Absa Home Loans)
Q: Dawid and Michelle, how long have each of you been with Absa?
Michelle: I started with the bank in 2004, approximately 10 years ago.
Dawid: I haven’t been working at Absa for quite as long; since 2007.
Q: What are each of your roles here?
Michelle: I am currently the National Manager of the Attorney Panel for Absa Home Loans.
Dawid: I am currently the Head of Strategic Stakeholder Engagement for Absa Home Loans.
Let’s talk about the Guarantee Hub.
Q: What is the Guarantee Hub?
Michelle: It is an electronic platform where transferring attorneys can request guarantees and the Absa panel attorneys can electronically issue the guarantees. These guarantees are electronically signed, making them secure and tamperproof. It is also an efficient method for both transfer and registering attorneys to complete this process and communicate with each other in terms of their requirements.
Dawid: Michelle has summarised it well. It is the inevitable way forward considering what technology has to offer. Absa’s entire philosophy and business model centres on putting our customers at the heart of everything we do. For us, that means responding appropriately to their needs and assisting them to make buying a new home more convenient. The Guarantee Hub will speed up the registration process from the traditional methods of communication and provide our customers with peace of mind that their applications cannot be intercepted and edited.
Q: What were the reasons of starting the project?
Michelle: One of the reasons was primarily to limit the bank's risk and in so doing, combat fraud. Having the guarantees issued in a tamperproof format and ensuring their authenticity, minimises the bank’s risk considerably.
Dawid: Yes, electronic platforms are the way forward. They are secure and there are checks and balances in place making it easier for the bank to monitor its processes. There have been many cases in the past where manual guarantees were tampered with and fraudulently issued. Not only does this expose the bank to risk, but also compromises both the seller and buyer in a property transaction as the monetary values involved are significant, making payment security of paramount importance.
Q: And how do you picture the Guarantee Hub in a year from now?
Michelle: At Absa, we have been the market leaders in this regard, and I foresee a quick adoption by both the transfer and the registration attorneys and we are positive that the other banks will adopt a similar process in due course.
Dawid: Yes, I think we are being watched closely by others in the banking industry. With this in mind, we hope that the industry will adopt the Guarantee Hub process to further secure an efficient and consumer-friendly property transfer process for customers.
Q: How do you see the Absa Guarantee Hub changing the conveyancing industry?
Michelle: Fundamentally I don't see it changing the industry as a whole; however, it certainly will have a significant and positive impact on the way that guarantees are being dealt with.
Dawid: Yes, attorneys are going to be exposed to security systems that are in place in other industries and are going to have to change the way they have worked for many years. It is however the way forward as the world moves towards secure electronic platforms.
Q: Do you foresee others following you?
Dawid: The drive towards technological adoption is a major factor changing the nature of the relationship that banks have with their customers. Digital platforms, online payments and security enhancements are fundamental to the way individuals operate and interact on a daily basis. It is a question of time before others will follow and in this case, we are pleased that we could pave the way.
Thank you for your time. This is very interesting and exciting indeed.