With banks and financial technology firms (fintechs) collaboratively working together, measures and solutions can be designed not just to meet the needs of customers, but to also ensure the survival amid the ongoing economic crisis.
The two have often been seen as competitors, but that notion has been dispelled by the Chief Executive Officer of the Ghana Interbank Payment and Settlement Systems (GhIPSS), Mr. Archie Hesse, and the Chief Executive Officer of the Ghana Association of Banks (GAB), Mr. John Awuah, who emphasized that collaboration, not rivalry, is the key to unlocking mutually beneficial opportunities.
“Fintechs cannot be effective alone or by working in silos. Instead of heated competition with other stakeholders, there is a need to forge partnerships that achieve universal access to financial services. A collaborative approach will also benefit fintechs, banks, EMIs and, most importantly, the underserved.”
Mr. Archie Hesse
Speaking at the Ghana Fintech Awards in Accra, Mr. Hesse averred that the recent developing fintech space with the support of other financial stakeholders has made significant strides in digital payments, with rapid progress over the last decade, which he said has been propelled by the COVID-19 pandemic.
According to Mr. Hesse, the impact of this progress is visible in the increased levels of financial inclusion and related economic empowerment. For instance, he said, in the recent published Global Findex Report by the World Bank, Ghana’s inclusion rate stood at 68 percent as at December 2021, increasing by 10 percent since 2017.
“This growth trajectory is predicated on technological gains in the financial services sector, created by a resilient digital ecosystem that is innovative, inclusive and anchored by a visionary and responsive regulatory environment.”
Mr. Archie Hesse
This, he added, can further be promoted by a collaborative effort targeting unserved and underserved segments of the population.
Fintech firms play a significant role in the financial services sector, and that, Mr. Hesse disclosed that the enactment of the Payment Systems and Services Act 2019 (Act 987) with the establishment of the Fintech and Innovation Office by Bank of Ghana seek to, among other things, structure the ecosystem to allow them play an even more important role in the economy as well as enhance collaboration.
For Mr. John Awuah, evolving customer needs and the ever-changing face of the financial services sector requires much greater collaboration between banks and fintechs. Through partnership, he said, the two can develop sustainable financial solutions and unlock new frontiers for growth.
Mr. Awuah, who also spoke at the same event, said it is high time banks and fintechs saw each as partners. He added that much more still needs to be done to enhance the regulatory and policy frameworks, so as to improve competitiveness and efficiency in the national financial system.
Excessive Regulations Suppressing Fintechs Growth
However, progress in promoting financial inclusion and digitisation has been undermined by excessive regulation of the financial technology space, according to industry players.
While reasonable regulations are key to a healthy competition, growth and development, players are of the view that too much of it can be counterproductive, hence, stifling innovation and serving as a barrier for new entrants.
“Regulations are still tight, and I would call on regulators to soften the regulations and allow fintechs to grow. The only way we can get more fintechs, more financial companies and new ideas coming through, is to reduce the threshold for regulation.”
“If we fail to do this, what happens normally is that people run away because regulation becomes a barrier to entry. So, it means that they, fintech firms, cannot innovate and bring up new ideas.”
Growth Africa Director for Taptap Send, Darryl Koku Mawutor Abraham
Similarly, Country Manager of DPO Pay, Mr. Frank Awelle, whose company was adjudged the Fintech Discovery of the Year, lamented that extreme regulation, if not checked, could hinder the burgeoning fintech space.
“Our challenges really have to do with regulations, and that is why we need the Ghana Fintech Association to come in and see how they can sanitise the space for us. Regulators should soften requirements for fintechs to allow for greater innovations and competition.”
Mr. Frank Awelle
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