FITC charges Africa’s central banks on fintech regulation
FITC, a technology-driven knowledge institution, has hosted its flagship Risk-Based Supervision (RBS) for Fintech programme in Kigali, Rwanda, to enhance stability and stimulate growth in the financial sector.
The five-day event, according to the firm, was held at the Marriott Hotel last week, as part of the company’s efforts to equip the financial services and other sectors with the invaluable capacity needed to navigate complex and dynamic regulatory supervision practices in the fintech space.
The programme, which is one of FITC’s interventions in the growth and development of fintech, is part of the recommendations from FITC’s last Fintech Conference, TechNovate 2021. It recommended deeper learning, engagement and collaboration that would help advance the industry.
It was one in a series of several offshore programmes to be organised by FITC this year, attracting participants from across sub-Saharan Africa, from regulators, players, enablers, funding partners, banks, telecom companies to government parastatals as well as other stakeholders who are involved in monitoring operations and safeguarding their stakeholders’ interests.
MD/CEO, FITC, Chizor Malize, noted that the competitive landscape of financial services is undergoing a paradigm shift and that new entrants are constantly disrupting the space with innovative digital solutions giving rise to new offerings, increased client acquisition and rapid market penetration.
“Technology continues to change the face of the financial services industry. The advent of digital financial services has created faster, more efficient, and typically cheaper banking solutions compared to traditional financial services. Many fintech has experienced a surge in demand as customer banking habits changed in the COVID-19 era. Before the outbreak of the pandemic, it was clear that fintech would play a pivotal role in financial services going forward. COVID-19 has undoubtedly accelerated that process” Malize stated.
She noted that RBS for Fintech is the leading approach to regulatory supervision of the ecosystem globally.
To ensure safety, soundness and financial stability within this evolving industry in the financial services sector, she said, central banks in Africa need to build a strong regulatory framework for supervising fintech development.
“We currently have about (576) fintech companies, enablers, funding partners, as well as numerous key stakeholders such as banks, telcos, and even governments. Many of our local start-ups have gone on to receive various funding and support, and others have gone to become global players and even Unicorns. It is therefore important to up-skill and retool the skillsets of bank supervisors and other players in ensuring they are well equipped to adequately regulate and supervise the evolving Fintech firms in their countries.
“The programme presents a transparent and credible mechanism for Fintech regulators to provide an all-inclusive, wide-ranging, and strategic approach to supervision of Fintech by approaching regulation from a structured system perspective that assesses risk exposures and gives priority to the resolution of risk,” she added.
At the end of the programme, participants were able to identify the most vulnerable areas and risks associated with fintech operation, discover how to entrench financial stability into the industry, apply key principles to building supervisory frameworks for fintech as well as apply RBSA tools and concepts in drafting supervision plans and performing supervisory activities for fintech.