Rwanda: Are Banks, Regulators Keeping Pace With Digital Disruptions?

As emerging technology companies race to provide digital financial services, some traditional players have expressed concerns over the potential threats that such firms can pose to the stability of the financial sector.

The scepticism stems from the fact that emerging tech firms in the sector lack the experience in managing risk and have "weak" governance structures, among shortcomings.

This could potentially adversely affect the stability of the financial sector.

This has been the narrative for the past few years and still is for some players who also view emerging tech firms as their next big competitors.

However, this trend has been changing, according to the Alliance for Financial Inclusion (AFI), the global network of central banks and other financial regulatory institutions from emerging and developing economies.

Alfred Hannig, the Executive Director of AFI, said on Tuesday in Kigali that central banks and other financial regulatory institutions are currently responding to digital disruption.

"Digital financial services is actually the most prominent area we are undertaking," he said at a press conference while announcing the upcoming AFI Global Policy Forum which takes place this week on Thursday.

He noted that the question was how to deal with the challenges that come with the adoption of digital technologies and putting in place the kind of d regulatory frameworks needed to propel digital financial services.

Analysts have argued that regulators are trailing tech firms, which are disrupting the industry, in terms of innovation.

This sometimes leaves some products unregulated.

Moreover, Hannig indicated that countries such as Peru, Rwanda, Malaysia, Philippines and others have been able to respond to what might be the negative effects of these digital services.

They have established frameworks for consumer protection and electronic money issuance, among others... Read more on All Africa

Source: All Africa