Ghana

BoG affirms commitment to innovation, financial inclusion

Business News of Friday, 26 February 2021

Source: thebusiness24.com.gh

The Bank of Ghana Headquaters [Credit Bloomberg] The Bank of Ghana Headquaters [Credit Bloomberg]

The Bank of Ghana has reaffirmed its commitment to addressing the financial inclusion needs of the unbanked and underserved persons and businesses.

In a release following the launch of its regulatory and innovation sandbox pilot in collaboration with EMTECH Service LLC., the bank said it remains committed to evolving an enabling and inclusive regulatory environment that promotes FinTechs and supports innovation.

Within the financial sector, a regulatory and innovation sandbox is a supportive and controlled policy environment that enables firms to test innovative products, services and business models under the supervision of a regulator.

“Effectively, the regulatory and innovation sandbox will provide a forum for financial sector innovators to interact with the sector regulator to test digital financial service innovations while evolving an enabling regulatory environment,” the bank said.

“In this regard, the bank and the innovator are able to assess the usefulness, viability and safety of innovations through shared understanding of their respective interests,” it added.

The sandbox will be available to banks, specialised deposit-taking institutions and payment service providers, including dedicated electronic money issuers, as well as unregulated entities and persons that have innovations that meet the sandbox requirements.

The central bank noted that innovations eligible for the sandbox environment will have to satisfy broad categories including new digital business models not currently covered explicitly or implicitly under any regulation; new and immature digital financial service technology; and innovative digital financial services products that have the potential of addressing a persistent financial inclusion challenge.

Within these broad categories, the Bank of Ghana said it will give preference to products and services leveraging blockchain technology, remittance products, crowdfunding products and services, e-KYC (electronic know your customer) platforms, RegTech (regulatory technology), SupTech (supervisory technology), digital banking products and services targeting financial inclusion for women, and innovative merchant payment solutions for micro, small and medium enterprises (MSMEs).

“Notably, the sandbox is of strategic importance in driving financial inclusion through innovative digital financial services, as it presents the opportunities to reduce time-to-market; allow regulators to learn about innovations faster; encourage innovators to formalise their business and incentivise incumbents to experiment with new ideas; reduce the cost of innovation for innovators; and provide valuable insight for regulators to evolve effective regulations,” the bank said.

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