Ghana’s financial digitization process enhanced by strong regulatory framework – Governor Addison
Governor of the Central Bank, Dr Ernest Addison, has said Ghana’s fast-paced financial digitisation process is a result of strong regulatory and supervisory frameworks underpinning payment systems in the country.
Making the assertion at the Standard Chartered’s Digital Banking, Innovation and Fintech Festival, the Governor noted that the current vibrant state of Ghana’s digital financial service ecosystem is a product of well-thought-out and carefully crafted reforms and policies, spearheaded by the Central Bank over the past two decades.
According to the Governor, the passage of the Payment Systems Act 2003 (Act 662), Branchless Banking Guidelines (BBG), the Electronic Money issuers and Agents
Guideline of 2015, the Payment Systems and Services Act, 2019 (Act 987) among others and coupled with the implemenatation of systems such as the Ghana Interbank Payment and Settlement Systems Limited (GhIPSS) have provided the legal basis and regulatory anchor for the introduction of technology in the banking industry and rapidly transformed the cuntry’s payment ecosystem.
“Additional institutional reforms carried out in line with the Payment Systems Act 2003 (Act 662) paved the way to establish the Ghana Interbank Payment and Settlement Systems Limited (GhIPSS) in May 2007. Since then, GhIPSS has rapidly transformed the payment ecosystem through the implementation of interoperable interbank retail payment systems, including electronic cheque clearing, automated clearing house for direct debit and credit funds transfer, instant payment, gh-Link card, and mobile money interoperability.
“These systems, in addition to complementary systems by banks, have facilitated straight-through processing of payment transactions swiftly and efficiently with marginal errors relative to manual processes,” stated the Governor.
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“Among others, the Payment Systems and Services Act, 2019 (Act 987) has created a conducive environment for inclusive and competitive delivery of digital financial services. Banks, specialized deposit-taking institutions and FinTechs are now permitted to provide digital financial services permissible under their licence type,” he added.
Speaking further at the event, the Governor however, noted that the digitization of financial services has come along with risks which threaten customer trust and has the potential to unwind the gains of acceptability of digital products and services by the Ghanaian populace.
According to the Governor, issues of cybercrime, scams, phishing, data and privacy breaches, digital illiteracy and unresponsiveness to customer complaints pose serious threats to consumer confidence in digital financial services.
“In view of this, the Bank has issued directives, regulations, policies and guidelines on Cyber Security to assist market players’ deal with such threats. It is important to note that the burden of security awareness is not only on market players. Indeed, the emergence of new and digital financial solutions has introduced significant complexities in regulation and supervision as well. Therefore, discussions on creating an enabling environment for financial sector digitization must also focus on regulatory technology (RegTech) and supervisory technology (SupTech),” remarked the Governor.
Concluding his remarks at the evenet, Dr Addison noted that, “As regulators, the Bank will continue to modernize the supportive regulatory frameworks to enhance security and promote confidence and trust in the ecosystem.
