Financial fraud has been commonplace in government and financial institutions. Auditors are unable to detect fraud under special circumstances, colluding with their clients many times. Oftentimes, these fraudulent dealings conceal the misdeeds.

But South African Web3 connoisseur, Prof Monica Singer has ever had her sights set on checking the prevalence of the vices.

For her whole life, she told NODO News in an exclusive interview in Cape Town, she wanted to introduce models that would reduce global corruption and fraud. This motivation drove her to become a chartered accountant believing that as an auditor or an accounting and auditing standard setter, she could be part of the process of reducing corruption and fraud.

“My first job was at the South African Institute of Chartered Accountants (SAICA), where I worked for eight years. But throughout the duration that I worked there, we kept seeing companies failing and fraud still persisted and went undetected,” Singer says. “I realized there is a concept called the ‘expectation gap’ in auditing. This is the difference between what the auditor can do and what the public thinks the auditor can do.”

Decision to Leave World Bank

In essence, fraud persisted in South Africa despite her representing the country in key global auditing and accounting standard setting bodies.

The realization, according to Singer, is that when there is collusion in a company, an auditor will never pick it up, which is why corruption still looms large.

Despite more standards, laws or training the auditors, and all other measures put in place, the reality, according to Singer, was that the system was and still is broken.

In 1995, at the age of 35, Singer — who is currently an advisory board member to the Global Digital Currency Association, setting the standards for self regulation of companies involved in the digital assets industry and an employee of ConsenSys, one of the world’s leading blockchain companies — went to work for the World Bank and thought she was “going to save the world.”

But the truth was that even though the world’s apex bank gave money to institutions and governments, it could not tame corruption as there were no upfront controls as to where the funds would go. It had no control over how that money was spent, she said.

“My inquiry at the lack of controls and the proliferating corruption were answered with a notion that the bank was never allowed to use the term ‘corruption’. It took a long time for the bank to decide that before it took any money to governments, it had to put measures in place to ensure that the money was never stolen,” she said.

Seven months after joining the World Bank, Singer left it more disappointed despite the optimism she had when she joined it.

Offer From Stock Exchange CEO

In South Africa, just after leaving World Bank in the US, Singer had an opportunity offered by the then Johannesburg Stock Exchange CEO Roy Anderson, to run a project that sought to convert all paper-based transactions at the stock market into digital share certificates, with the payments no longer being paid by cheques but electronically, achieving final, irrevocable transactions.

Singer indicates that she had zero experience in stock markets, while South Africa itself was by then – between 1995 and 1996 – categorized as the worst emerging market in the world with fraud and operational inefficiencies due to the volume of unsettled trades.

“And so, despite my lack of knowledge in stocks, my good research skills got me to work,” Singer recalls. “I learnt more about the stocks, began the project in 1996 and sought to go live in 2000. But then that was the year of the Y2K millennium bug and no one wanted to implement any digital projects during that period. So it was all delayed.”

She added: “After Y2K, I was allowed to bring 10 companies into the technology and two years later the rest of the other companies. It became a success.”

Tackling Fraud in Stock Markets

In 2010 onwards, South Africa was consequently ranked by the World Economic Forum among the best financial infrastructure of the developed world alongside the likes of Hong Kong, and Singapore because of the technology that Singer implemented.

“We essentially eliminated all the fraud that was rampant in the stock markets and that was perhaps the best feeling for me ever since I was a little girl when I held the notion that one day I would reduce corruption and fraud in the world,” she said.

Singer, who was also a fellow of the Institute of Directors and the vice chair of the Global Legal Entity Identifier Foundation (GLEIF), still felt dissatisfied because she could not provide the listed companies in real time the information as to who was buying or selling shares. This would enable listed companies to protect themselves in the event of a takeover.

The market refused to allow the name of the beneficial owners on the central register held by Strate, the central securities depository she created in 1998 and ran it as its CEO until 2017.

The 2008 Financial Crisis

When Lehman Brothers collapsed on September 15, 2008, she felt there were no mechanisms in place to warn investors of any such phenomena.

When ‘Occupy Wall Street’ happened in 2011, South Africa’s Johannesburg Stocks Exchange (JSE) was, however, never affected due to the measures Singer had put in place, even though losses due to lack of trust had led to the closure of most major stock markets.

“Our risk management tools were so superior that they could manage the systemic risks that were taking place in other stock markets around the world,” she said.

In 2016, she heard of bitcoin and became intrigued. She read Satoshi Nakamoto’s Bitcoin whitepaper and realized that centralizing institutions opened doors for security risks to permeate throughout the organization.

Decentralization, Satoshi’s white paper said, could solve all these problems.

Another Life-Changing Meeting

It was during her attendance at one of the industry events in 2017 that a narrative emerged that she was going full-time into the blockchain.

And after initially, unknowingly pushing away ConsenSys CEO and one of Ethereum’s co-founders, Joseph Lubin’s propositions to work at the tech company, she later joined the organization and has never looked back as she is now part of a team that has the vision to implement a new global system with transparency and technology that is immutable and peer-to-peer without the need to rely on intermediaries.

At ConsenSys, she initially got the job of educating the masses on Web3; an assessment that was rather tough because many that she taught had no patience to listen to her. They dismissed the technology as a fad or a ponzi scheme.

ConsenSys, essentially is the creator of the most useful and used digital wallet Metamask. It is a platform that makes it easy to build applications on Ethereum and participate in DeFi, NFTs, DAOs, and the metaverse.

“I now do education and advocacy at ConsenSys,” she told NODO News. “A lot of what people do with regard to blockchain, they do not understand. Therefore we need to do more advocacy.”

She also works in implementing blockchain solutions on behalf of ConsenSys, where she is the tech organization’s South African lead.

Empowering Women in Blockchain

The concepts of crypto-tech, ledger, and blockchain, she therefore intimated, are much more useful in accounting. Blockchain prevents collusion in companies and creative accounting due to its transparent, decentralized and immutable nature. This presents accounts that are transparent and never corrupted.

On the prospects of African women in the tech space, she told NODO News, how girls have been pre-conditioned by society to have ideas that they do not need to be independent and can wait for a ‘prince’ to come and save them.

“Society has been biased towards women. And it is hard for them especially in this industry since girls now hold the notion that they do not need to study sciences or math,” she told NODO News. “But the truth is girls should learn programming, math, and languages. We need to tell them to learn these subjects, and never give them the impression that a husband will come to ‘save’ them. Not studying these subjects automatically takes girls off the markets of important professions.”

South African cultures, she said, are also chauvinistic. So girls need to work extra hard to make themselves empowered.

Singer is, accordingly, forming a Woman in Blockchain movement in Cape Town, South Africa for mentoring girls to rise and find their place in the blockchain space.

-Edited by Shigeru Sato
-Photos: Monica Singer /Photographed by Faustine Ngila, NODO News