The banking industry’s regulator, the Bank of Ghana, has called on Republic Bank Ghana Plc., a subsidiary of Republic Financial Holdings Limited of Trinidad & Tobago, to introduce robust policies to deal with cyber security issues related to the use of Credit Cards.
Mr. Osei Gyasi, Head of Banking Supervision at the Bank of Ghana, who made the call, said the use of credit cards has witnessed a massive expansion over the past few years but these cards are prone to cyber-attacks and the bank needs to protect data and customers from such risks as it introduces its new cards into the market.
“Ayekoo to Republic Bank for this major feat in the digital banking space. Whilst applauding you for expanding your product offering in digital banking space, I wish to admonish you to introduce robust policy systems and measures to deal with cyber risk associated with digital banking products and services.
“Credit cards especially, are susceptible to been used for cyber fraud and the bank needs to introduce measures to ensure consumer and data protection. There is also the need for the bank to invest more in infrastructure as it expands its digital banking offering”.
Osei Gyasi
Speaking at the launch of the new cards at the Polo Courts in Accra, Mr. Osei Gyasi said it is refreshing to note that Republic Bank continues to be unrelenting in introducing innovative banking products which has culminated in the introduction of the Four fantastic cards.
Mr. Osei Gyasi welcomes the initiative by the bank, which he said, will potentially contribute positively to “deepening our payments system to the benefit of banking customers”. He indicated that this laudable initiative by the Republic Bank also supports the cash lite agenda and digitization drive of the Government of Ghana.
The Head of Banking Supervision at BoG underscored that since entering the banking sector, Republic Bank has distinguished itself as a bank with a mission to implement sound policies and provide personalized, efficient and competitively priced financial products and services to the benefit of customers, staff, shareholders, and the various communities where its branches are situated.
BoG lauds Republic Bank’s Innovation
Mr. Osei Gyasi recalled his remarks in January 2022 during the commissioning of the Bank’s headquarters annex, where he encouraged Republic Bank to keep pace with the rapid achievements in technology and growth of FinTechs in the financial services space and shift towards introducing more electronic-driven products and services.
“In line with the objective of customer centralism, we expect that financial digitization will shape the banking business to compete with FinTechs in the payments system space. Hence, there is the need for adoption and diffusion of technology in every sphere of banking sector operations. It is therefore, refreshing that we are here four months down the line to launch the four new Republic Bank cards known as The Fantastic 4.
“The introduction of these cards attests to the bank’s focus on promoting innovative electronic products and services that add value and reduce the financial burden of its cherished customers and prospects”.
Osei Gyasi
Increasing use of credit cards
Mr. Osei Gyasi indicated that globally, there has been an increasing use of credit cards with 2.8 billion credit cards in use worldwide and 1.06 billion credit cards in use in the United States only. He noted that MasterCard leads among the most popular credit cards with 551 million credit cards in circulation Worldwide.
He expounded that 70% of people have at least one credit card globally and Americans are 40% likely to use a credit card on a purchase. He indicated that the expectation is that credit card use must be positively correlated with credit card debt. This, Mr. Osei Gyasi said, will allow businesses and individuals to take small loans from their credit card providers in the hope of paying back before the interest kicks in.
On this backdrop, it is no surprise that credit cards have become an important product offering, especially for bank customers in Ghana, he said. Mr. Osei Gyasi said credit card plays a key role in financial intermediation by providing access to credits. It affords the holder the opportunity to pay for goods and services whilst providing an option for deferred payments. It also provides a credit history for the holder which can provide a good reference point to assess other credit facilities from the bank.
“I would like to encourage Republic Bank to monitor and keep records of the performance of these cards for credit reporting purposes and to engender the development of a creditable credit data for our banking sector”.
Osei Gyasi
He noted the growth trajectory of Republic bank in the financial sector is commendable. He gave a brief history of the bank which started as an indigenous limited liability company in 1990. He acknowledged that Republic Bank was the first to be licensed as a mortgage finance institution in Ghana before so many years down the line, changing its name to the Republic Bank Ghana Limited.
Banking industry regulation
Mr. Osei Gyasi disclosed that as the regulator, the Bank of Ghana continues to keenly monitor all banks to ensure the stability and soundness of the industry.
Mr. Osei Gyasi noted that the Bank of Ghana has provided a supportive directive, regulations, policies and guidelines on cyber security to safeguard the financial sector against cyber risks but “banks must also be proactive in strengthening internal risk management frameworks as well as build a robust and secure digital infrastructure to forestall cybercrime incidences”.
He further indicated that it is also essential that comprehensive and stringent PYC procedures are implemented to improve banks’ customer acceptance policy. This, he said, will help prevent money laundering, terrorist financing and credit card fraud through the banking sector.
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