Author: Mfidie

The Chief Executive Officer of the Ghana Interbank Payment and Settlement Systems (GhiPSS) Limited, Archie Hesse has called for a Technology Regulator to control Information and Communication Technology (ICT) applications and infrastructures.

He explained that the regulator would ensure that the soft and hard ICT infrastructures, as well as products and services, to ensure they were foolproof and met international standards.

Mr Hesse made the call at a Fintech Summit in Accra on Friday organised by the Accra-based English Radio Station, Citi FM.

The programme formed part of the station’s business festival under the theme “The Future of the Financial Technology Ecosystem in Ghana”.

It was under the auspices of GhiPSS, Hubtel, Fidelity Bank, Payswitch.

Mr Hesse said Europe and Asia have technology regulators and Ghana could also do same.

Touching on the topic of the programme, he said, Fintech meaning financial technology was about automating the processes and transactions of the banks.

“Fintech is nothing new.  It is an old phenomenon that has caught up with us,” he said, stressing “Fintech helps do things better and promote synergy,” he said.

The Head of Payment Systems at the Bank of Ghana (BoG), Dr Setor Amediku said the BoG was developing a law to regulate the Fintech Industry.

He said since the Fintech held cash, there was the need to regulate them to promote financial and price stability.

Dr Amediku said there was the need for the law to protect the cyber and data security of individuals and companies.

Currently, there were 71 Fintech companies in the country.

Dr Amediku said financial inclusion had increased from 41 to 58 per cent, saying the objective of the government was to achieve 75 per cent financial inclusion by the year 2020.

The Chief Executive Officer of Hubtel, Alex Bram said though regulation was good, over regulation would stifle the industry.

He said Fintech was breaking the bureaucracy in accessing services from the state, and urged the state institutions to embrace technology to improve on their services.

Technology, Mr Bram said was bringing convenience and value to the lives of individuals.

The Chief Technology Officer of Payswitch, Emmanuel Osei-Akoto said Fintech was breaking the barriers of banking and giving opportunity to access financial services.

He said banks should be service providers and a storage house of money, saying banks should deploy a system in which they could order goods for their customers.

The Director of Strategic Partnership, Dr William Derban said banks had always embraced technology in their operations, saying the adoption of Automated Teller Machines and other systems were part of technology.

He called for stronger partnership among the banks, telecom companies and the banks to promote the Fintech industry.

The Chief Executive Officer of Rancard, Kofi Dadzie said Fintech was nothing new and came about through the operations of banks.

He said Fintech companies bring innovation and disruptions in the technology sector, indicating that Fintech would be the future of banking as it would provide easy and cheap capital to the entire citizenry.

Source: The Ghanaian Times

Participants at the Financial Technology Summit organised as part of the Citi Business Festival have emphasized the need to create a financial ecosystem that will guarantee the safety of funds with financial technology (fintech) companies.

According to them, the changing phase of technology makes it imperative for some level of regulation to enhance the security of electronic transactions in the future.

The panel at the summit was made up of the Head of Payment Systems, at the Bank of Ghana, Dr. Setor Amediku, the CEO of Ghana Interbank Payment and Settlement Systems (GhIIPSS), Mr. Archie Hesse, the CTO of PaySwitch, Emmanuel Osei Akoto, the CEO of Rancard Solutions, Kofi Dadzie, the CEO of Hubtel- Alex Brahm, and William Derban from Fidelity Bank.

Discussing the topic the Future of Financial Ecosystem in Ghana, most members of the panel stressed the need for some supervision.

For the CEO of Rancard Solutions, Kofi Dadzie, the central bank would have to catch up with the speed of innovation since electronic transactions will change the phase of the country’s payment system in the future.

He warned that the type of disruption that will hit the fintech industry may not necessarily come from big organisations whose activities are constantly being monitored by the regulators.

“We will not see the pace of innovation that we need coming from large state organizations and from large corporate, simply because of the type of regulation and the space in which they operate and the nature of large organization”.

According to him, the Bank of Ghana must do more than just setting regulations for fintechs and incorporate their activities into the operations of the financial system.

On his part, the CEO of Hubtel, Alex Bram, cautioned that the level of regulation will depend on the nature of transaction undertaken by fintechs.

Meanwhile, the Head of Payment Systems at the Bank of Ghana, Dr. Setor Amediku stated that the payment systems are too critical for the stability of prices, hence the Bank of Ghana will be tough in regulating the area to prevent a collapse of the financial system.

Dr Amediku maintained that the non-existence of proper regulation to supervise the activities of fintechs could distort the financial system, affecting economic stability.

He, therefore, urged the fintechs and telcos to take a six months window of opportunity created by the Bank of Ghana to upgrade their security system to meet a new requirement that will soon be passed into a law.

“I think you are all aware that we have not regularized MTN Mobile Money, Vodafone Cash, Airtel Tigo Cash and the fntechs. So you have a window of opportunity of six months to put their house in order to meet the minimum cybersecurity regulations”.

Dr Amediku warned that the BoG will not allow the system to be abused like it happened in the microfinance industry, leading to the loss of millions of cedis.

The CEO of GhIPSS, Mr Archie Hesse maintained that the growth of fintechs shows that there must be more collaborations between fintechs, regulators and financial institutions.

The value of retail payments (excluding cash) increased by 43.18 per cent to GH¢381.43 billion in 2017 from GH¢266.39 billion in 2016.

This growth in the value electronic retail payments for the year under review, 2017 was driven largely by the increase in the value of mobile money services and e-zwich.

This is according to a report by the Bank of Ghana. The report titled “PAYMENT SYSTEMS OVERSIGHT ANNUAL REPORT, 2017” chronicled the varied ways in which transactions carried out in the Ghanaian market are paid for.

The report highlights the many payment systems and forms in Ghana and how the use of digital payments is transforming the payment space.

The report also touches on the critical role financial technology firms popularly known as FINTECH firms are playing in the provision of payment systems or a means of carrying out payment for transactions. They also provide an array of services to the banking sector. Currently, there are 71 FinTech firms in Ghana

Mobile money which is one of the most popular and widely used mans of electronic payments has overtaken cheques as the main non-cash retail payment instrument with 981.6 million volume of transactions, followed by Debit Card (60.4 million), e-zwich (8.4 million), cheques (7.3 million) and Direct Credit Transfer (6.1 million) in 2017.

However, in terms of the value of transactions undertaken in 2017, cheques continued to maintain its lead with GH¢179.6 billion while mobile money followed closely with GH¢155.8 billion.

So the implication here is mobile money leads in terms of its usage as a means of payment for goods and services in the retail space followed by debit cards, e-zwich, cheques and direct credit transfer.

However, in terms of the total amount of monetary value of these payment systems in the retail space, cheques led the lot. Which will imply the monetary amount of cheque transactions is still higher than its peers.

The significant growth in digital payments as a preferred means of transacting retail cash payments according to the report can be attributed to conscious efforts by Government and Bank of Ghana to promote digital payments as an alternative to cash; and customers demand fast, convenient and efficient payments.

Other developments in the payment systems space
The report also captures a number of developments during the year under review such as the introduction of a number of legal and regulatory reforms such as the Payment Systems and Services Bill which was submitted to the cabinet through the Ministry of Finance for onward transmission to parliament.

The Bill made provision for cybersecurity regulations and adherence to Information and Communication Technology standards to minimize cyber risk, airtime use for payment of insurance premium, agent registry, mobile money interoperability, migration of magnetic stripe cards to EMV standard and support for National Identification Authority.

Digital/Electronic products and services
The report also looked at the products and services developed by banks in collaboration with other payment systems providers. These products range from automated teller machines (ATMs) for Rural and community banks (RCBs) to broaden their base to products that enable unbanked to purchase Government of Ghana domestic fixed income bonds using mobile money wallets

Financial Inclusion
The government in collaboration with key stakeholders including the Bank of Ghana developed a draft National Financial Inclusion Development Strategy (NFIDS) framework.

The document was developed by the government of Ghana with technical assistance from the World Bank in collaboration with relevant key stakeholders including Bank of Ghana, National Insurance Commission, and the Pensions Regulatory Authority.

The National Financial Inclusion and Development Strategy (NFIDS) framework aims at increasing access to formal financial services at affordable cost for the adult population. It is envisaged that it would increase financial inclusion from 58 per cent to 75 per cent by 2023.

Source: Philip Nanfuri | JoyBusiness