11 Jul 2018

Minister of Transport and Communications says there is need to upgrade consumer awareness and protection around Fintech in order to promote benefits and illuminate risks and mitigation strategies.

Addressing participants at a Fintech workshop on financial technology, payments and financial inclusion organised by Bank of Botswana (BoB), International Monetary Fund (IMF) and Bank of Canada (BoC) recently, Mr Kitso Mokaila said Botswana was in the process of enacting electronic payments services providers legislation  with the aim to facilitate orderly application of Fintech in financial services and payments.

“As we harness opportunities, we should recognise and mitigate the risks such as disruption and losses arising from system failure, cybercrime, misconduct and criminality, generally,” said Mr Mokaila.

He noted that the country was well advanced in providing backbone infrastructure to facilitate requisite capacity for effective connectivity and wider geographical coverage.

He indicated that financial and telecommunications sectors were increasingly collaborating to offer products and solutions that enhanced convenience, speed and efficiency in relation to remittances and payments for services and that facilitated access to financial services, other utilities as well as government services.

Again, he said institutions such as the Communications Regulator played a key role in ensuring access to affordable digital technology and its integration in economic activity.

On elements that would be required to optimise Fintech benefits, Mr Mokaila said the economy must have skills and entrepreneurial capabilities required to handle complexities, opportunities and risks associated with Fintech.

“Appropriate human and business development strategies are needed in this regard,” he said.

He also said regulatory collaboration and congruity was necessary among efforts of those with oversight for various facets of the financial sector, communications and utility providers.

For his part, Mr Scott Hendry, special director for Fintech, said Fintech is a technology-enabled innovation in financial services that could result in new business models, applications, processes or products with an associated material effect on the provision of financial services.

Giving a presentation on transformation of financial systems, Mr Hendry said Botswana should consider Fintech because it was cheaper and had more efficient financial services, financial inclusion, improved security and regulatory compliance, increased transparency and introduction of new products and services tailored to customers.

He said the impact of Fintech on market structure would be financial innovation which may have material implications for market structure, resulting in level of concentration being reduced given greater competition, lower barriers to entry drive contestability and composition of service providers may be affected due to the unbundling of financial services and new entrants. ENDS