African governments have been urged to build capacity of their respective financial regulators to ensure they understand operations and risks associated with the innovative financial technologies.
According to speakers at the Africa Fintech Festival currently underway in Naivasha, Kenya equipping the regulatory bodies with personnel with necessary technical skillset will ensure developed regulations are not disruptive to countries’ financial stability as well as ensure investor and consumer protection without inhibiting their growth.
“Regulatory bodies historically have not been equipped with the skillset that required to fully supervise the fintech space,” said Kwame Oppong, Director Fintech & Innovation, Bank of Ghana.
Speaking during the event, Secretary for ICT, E-Government and Digital Economy Mary Kerema said the Kenyan government helped build capacity of its regulators by supporting the establishment of regulatory sandbox for the financial sector innovations which has helped in the growth of fintechs in Kenya.
According to Kerema, regulatory sandbox such as one established by the Central Bank of Kenya (CBK) and the Capital Markets Authority (CMA) have been set up to facilitate the testing of new financial products and services and help them refine their offerings before a broader rollout.
“Fintechs have the potential to drive financial inclusion, bridge economic disparities and propel Africa into a new era of prosperity and inclusivity, from mobile banking and blockchain to AI driven financial services, fintech innovations are democratizing the access to financial resources enabling millions to participate in the global arena,” said Kerema.
Additionally, the regulators in the continent have been urged to collaborate in developing a pan-African regulatory sandbox that will ensure regulations in the continent are harmonized in order to ensure applications and other financial innovations operate seamlessly across the border in the era of the African Continental Free Trade Area (AfCFTA) which is expected to boost Africa’s gross domestic product by at least $450 billion.
“The pace at which fintechs and wider digital finance is impacting the financial sector warrants central banks and all other financial regulators to be much more initiative-taking in providing the enabling policy and regulatory framework if Africa is to fully reap the benefits of digitization and digitalization,” added Dr Patrick Olomo, Senior Economist at the Africa Union.
The close collaboration between African regulators is also expected to ensure the regulation is well understood as well as protect investors and consumers and their data.
“With the regulators, this is an opportunity to co-create. we want to give the customers an exciting, elevating and a simple transparent experience. However we can not do it alone,” noted Esther Waititu, Safaricom Chief Financial Services Officer.
The two day festival that has brought together policymakers, private sector and innovators ends Friday.
