Under the Interpretation Section, the Banking Act 2004 defines a bank as a company incorporated under the Companies Act, or a branch of a company incorporated abroad, which is licensed under section 7(5) of the Act to carry on any of the following –(a)banking business;(b) Islamic banking business;(c) private banking business;(d) digital banking business. It defines banking business as (i)the business of accepting sums of money, in the form of deposits or other funds, whether or not such deposits or funds involve the issue of securities or other obligations howsoever described, withdrawable or repayable on demand or after a fixed period or after notice; and(ii)the use of such deposits or funds, in whole or in part, for –(A)loans, advances or investments, on the own account and at the risk of the person carrying on such business;(B)the business of acquiring, under an agreement with a person, an asset from a supplier for the purpose of letting out the asset to the person, subject to payment of instalments together with an option to retain ownership of the asset at the end of the contractual period; (iii)paying and collecting cheques drawn by or paid in by customers and making other payment instruments available to customers; and(b)includes such services as are incidental and necessary to banking.
All relationships between a bank, established under the laws of Mauritius, and its clients find their legal basis from “le droit du contrat “; the provisions thereof are embodied under our Civil Code. The French Civil Code which was promulgated in 1804, was subsequently extended to Mauritius under the title “Code Napoléon” by decree of Decaen, Capitaine-General, on the 21 April 1808. When the French left in December 1810, both the latter and the British executed the “Acte de Capitulation “on the 3 December 1810 at 1 o’clock at the British Head Quarters, at Pamplemousses. It is stipulated at article 8, under the Code Farquhar, that “the inhabitants shall preserve their religion, laws, and customs”. The Civil Code had and still remains our substantive law.
Although the modes of banking transactions, having crossed our borders, have changed forms over time, ‘le droit du contrat’ remains the legal basis.
Over the years through methods and resource of their own, until the Bank of Mauritius had set the guidelines, banks have been able to provide basic customer support, unsuccessfully or rather successfully detecting and preventing fraudulent activities, communicating corporate and individual account information and the history of all transactions, wrongly or rightly offering personalised financial recommendations, advising clients on transactions and payments and depending on the mood of the staff providing basic customer support, not to mention the long queues in the rain or the blazing sun, including the majority of elderly people.
Based on records, data and existing information about the clients and the nature of the transaction, AI can automatically control and adjust many aspects of a banker’s duties towards customers, but it is unlikely to fully replace the human element in banking. Many writers of books, materials and articles tend towards portraying AI as an unwavering, staunch and super-power character.
Unfortunately, not all duties of the banker towards its customer may be automated by AI, human judgment will still be needed. Such judgment based on subjective element, very often results in human failures where AI would be having no place resulting into the dissatisfaction of the customers. If the relationship between the banker and the client is semi- subjective, however, for the latter, knowing objectively the whereabouts of his monies is essential.
Can AI go in depth and address the following issues among others?
a) Can AI understand that the relationship between the banker and its customer is a Debtor/Creditor relationship and that any amount standing on the accounts of a client, has been borrowed by the bank and is owed to the customer only?
b) Can AI understand that it is an implied term of the Banker/Customer relationship, whilst opening bank accounts that all money belonging to the client would be kept safely?
c) Will AI understand the nitty-gritty of the various loan facility agreements designed to guarantee banking facilities and where Mauritius has a special regime of fixed and floating charges?
d) Will AI be able to replace the fraud department of a bank to detect cases where a client who has never been a subscriber to any card service provided by a bank for the purpose of effecting banking business and where money has been paid to third parties?
e) Can AI detect instances where banks do inadvertently allow unauthorised person or persons to access a client’s accounts and debit funds from these accounts without the client’s knowledge and consent?
f) Can AI exercise the degree of care and skill in respect of the customer’s money?
g) Can AI replace the Ombudsman for financial services to mediate the problems of dissatisfied clients? By staying calm; being an active listener, personalising the interaction, acknowledging the customer’s emotions, using positive language, restating what they told you, building trust and thanking them.
h) Can the average customer understand if being intimated that his bank accounts are being run by AI?
A survey across the Island will give an answer to the above questions, where many customers complaining about the shortcomings in the banking sector; hence the establishment of the office of the Ombudsman for financial services. The huge profits generated by the banks make them completely neglect people who are eager for adequate banking service.
In the long run, would it be possible for AI to have an upper hand on banking business? Some schools of thought go in this direction albeit in Mauritius or abroad. However, AI does present challenges, such as ethical concerns regarding personal information and bias, which require careful governance.
Sources: Mauritius Banking Act 2004, Google and other related materials
