Fintechs are a key component of the financial inclusion agenda and no longer exist on the periphery, the Head of Retail Banking-FBN Bank Ghana, Allen Quaye, has said.
Speaking ahead of The Money Summit (TMS) 2023, which takes place on May 9th under the theme ‘Africa’s robust financial sector: the catalyst for sustainable economic growth’, Mr. Quaye explained that in the fintech revolution’s early stages, traditional financial institutions were skeptical about the ability of fintechs to scale and meet demand.
However, the situation has changed as fintechs have helped increase access to financial services for the underserved; and the money from them is making its way into the traditional system, benefiting everyone, he noted.
This comes as no surprise, since in the decade leading up to 2022 some 1.2 billion previously unbanked adults gained access to financial services and the unbanked population fell by 35 percent – especially in sub-Saharan Africa. This was made possible through fintech solutions, primarily mobile money.
However, as fintechs continue to grow, he said, there is a need for regulation to ensure that customers’ interests are protected and the risks associated with fintechs are mitigated. Mr. Quaye highlighted the importance of policies and rules applicable to banking firms.
“The regulator will want to look at issues like anti-money laundering, know your customer, pricing, and customer service to ensure that fintechs and banks comply with the Banking Act,” he said.
The banker also noted that fintechs must work within the Banking Act framework for banks to partner with them.
He added that policies and regulations, however, should not stifle innovation. He cited the Indian market as an example of how friendly policies toward fintechs can drive financial inclusion, leading to the establishment of several fintech companies and the investment of millions of dollars in fintech – which has led to massive financial inclusion in India.
While the banking industry is heavily regulated, fintechs and banks can work in partnership to achieve financial inclusion; and any regulation or policy that is unhealthy for banks would also be a challenge for fintechs to enter into partnerships. However, it is essential to ensure that fintech applications are user-friendly, addressing issues such as pricing, convenience and product relevance to customers.
“If a fintech breaches the Banking Act, it means that its partnership with the bank will either have to come to a halt or has to be amended to fit within the framework of the Banking Act,” FBN Bank’s Head of Retail Banking said.
Mr. Quaye emphasised that FBN Bank is committed to partnering with fintechs to drive financial inclusion, constantly exploring new ways to provide innovative financial services and deliver value to its customers.
His remarks highlight the importance of collaboration between fintechs and banks in achieving financial inclusion, while acknowledging the role of regulation in protecting customers and mitigating risks associated with fintechs.
The third edition of TMS will bring together experts from across the financial industry to discuss latest trends and opportunities in Africa’s rapidly evolving financial landscape.
During the first plenary session, industry experts will share innovative ideas and predictions that will drive economic growth and shape the future of fintech in Africa.
The session will explore how traditional financial institutions and tech-savvy start-ups can collaborate to promote financial inclusiveness and create a robust financial sector, as the global Fintech market is expected to reach US$332.5billion by 2028.
The panellists in this session include Archie Hesse, Chief Executive Officer (CEO) of GhIPSS; Eric Coffie, Chief Digital and Marketing Officer-GCB Bank; and Allen Quaye, Head-Retail Banking at FBN Bank Ghana. Richard Nunekpeku, Vice president-Ghana Fintech and Payment Association, will moderate the discussion. The session’s topic is ‘From competition to collaboration: How fintech is shaping the future of finance’.
In the second plenary session, panellists including Edward Forkuo Kyei,Group CEO-Glico Group; Kwabena Boamah, Managing Director-Stanbic Investment Management Systems (SIMS); Dzifa Fiati, Head-Group Business at Star Life Assurance; and Nana Wiafe Boamah, Chief Investment Officer-Axis Pensions Trust, will discuss the significance of a robust securities industry to Ghana’s economy, and the roles of insurance, pensions, fund managers and other market players.