19 Mar 2026

The rapid expansion of non-bank financial institutions (NBFIs), now representing a substantial share of financial assets worldwide, is reshaping global and domestic financial systems, prompting regulators to strengthen oversight and adapt to a range of emerging risks.

According to the Financial Stability Board, the sector grew by 9.4 per cent in 2024, almost twice the pace of traditional banking institutions, and accounts for nearly 51 per cent of global financial assets, Non-Bank Financial Institutions Regulatory Authority (NBFIRA) senior risk coordinator, Ms Tumisang Ramotlopi, said Wednesday during the Exclusive Human Capital Consultancy (EHCC) summit that was held in Gaborone.

Domestically, she said NBFIs constituted more than half of the financial system’s assets, with retirement funds, insurance companies and capital markets contributing significantly to the sector’s growth.

Ms Ramotlopi explained that the regulatory landscape was shared among several key institutions, adding that the central bank oversaw banking stability, while the Financial Intelligence Agency focused on combating money laundering and terrorism financing.

NBFIRA is tasked with supervising the non-bank sector, including insurance, retirement funds, capital markets and virtual assets, ensuring those institutions operate safely and in line with regulatory expectations.

A central concern Ms Ramotlopi raised was the increasing interconnectedness between banks and NBFIs, explaining that previously distinct sectors were now deeply linked, creating structural vulnerabilities that could amplify the transmission of financial shocks.

She mentioned that geopolitical tensions, cross-border financial flows and technological disruptions, including advances in artificial intelligence and digital assets were further complicating the risk landscape.

Cybersecurity threats were also highlighted as a critical concern, with global assessments showing that such threats continued to rise in frequency and severity, and had the potential to disrupt essential services, undermine public trust and cause economic damage, particularly if large institutions are targeted.

To address these challenges, Ms Ramotlopi stated that regulators were enhancing risk-based supervision, improving stress testing and operational resilience as well as strengthening financial crime detection systems.

She further added that there was also a growing focus on environmental, social, and governance (ESG) compliance, data protection, and the adoption of regulatory technology (RegTech) to monitor compliance in real time.

Ms Ramotlopi emphasised that the future of compliance was in balancing innovation with robust governance, noting that technology offered significant opportunities for efficiency and risk management, but must be implemented responsibly with proper oversight, ethical safeguards and risk frameworks.

“Effective collaboration between regulators, financial institutions, and stakeholders is essential,” she said, further adding that “ensuring resilience in the non-bank financial sector is crucial for economic stability and sustainable growth.”

Ms Ramotlopi said that as NBFIs continued to expand, the sector’s resilience and compliance capabilities would be key to maintaining confidence in the financial system while supporting innovation and long-term growth.

EHCC chairperson, Mr Joe Ndadi, highlighted the organisation’s mission to deliver tailored digital solutions focused on customer needs, security and ethical practices.

With the theme: The Future of Compliance, Innovation, and Artificial Intelligence, Mr Ndadi said the summit would address growing regulatory demands and the impact of emerging technologies.

The two-day summit, featuring discussions on risk management, corporate governance, ESG principles and global compliance trends, brought together government officials, business leaders and key stakeholders, to equip them with practical tools to strengthen compliance and manage risk in an evolving business environment. ENDS