EUROMONEY
GHANA/WEST AFRICAN CONFERENCE
BUILDING A DIGITAL BUSINESS AND FINANCIAL ECOSYSTEM
OPENING KEYNOTE ADDRESS BY
DR. ERNEST ADDISON
GOVERNOR, BANK OF GHANA
KEMPINSKI HOTEL, ACCRA
SEPTEMBER 25, 2018
Your Excellency, Vice President of the Republic of Ghana -
Alhaji Dr. Mahamudu Bawumia,
Deputy Governors of the Bank of Ghana,
Honourable Ministers of State and Members of Parliament,
The Senior External Adviser, Euromoney Conference,
Representatives of MasterCard Foundation,
Stakeholders in the Digital Finance Sector,
Distinguished Guests,
Ladies and Gentlemen, all protocols observed.
1. Good morning and it is a pleasure to participate in this
Euromoney Ghana/West Africa Conference on building a
digital business and financial ecosystem. Before proceeding,
let me thank Euromoney for choosing Accra as the host city
for this conference and also for providing such a unique
platform for industry experts, regulators, and policymakers
to deliberate on digitization of business and the financial
ecosystem. I believe these deliberations would facilitate and
enhance the pursuit of financial inclusion by countries across
the West African sub-region.
2.
Ladies and Gentlemen, a decade ago the importance and
criticality of payment systems was only heard and
understood exclusively within banking circles. Payment
services were entirely a space dominated by banks.
Customers of banks wrote cheques that were issued by
banks and deposited into accounts held by banks. Banks
settled payments among themselves through a clearing
arrangement. Overtime images of cheques facilitated
clearing; Even as electronic payment developed, debit and
credit cards were initially issued by banks. Today, this has
changed considerably and the payment systems space has
grown to include many non-bank actors, including
telecommunication companies and financial technology
firms. Financial digitization has unleashed a wave of financial
products and services at minimum cost to meet current
business demands for financial services. Digitisation brings
many benefits and can help scale up access to financial
services through mobile phones, POS and access points
through an agent network.
3. The consumer-experience with financial services is rapidly
transforming on several fronts. For instance, across West
Africa, consumer interfaces are gradually moving online and
physical notes and coins are being replaced by electronic
forms of payment.
4. Ladies and gentlemen, this inaugural Euromoney Conference
is taking place at a time that Ghana is emerging as a major
player in financial inclusion and digitisation of the banking
system in West Africa. The World Bank Global Findex report
released in April 2018 revealed that the share of adults
owning bank accounts in Ghana increased to 58 percent in
2017 compared with the Sub-Saharan Africa average of 43
percent, and up from 41 percent in 2014 driven mainly by
innovations in the digital finance space.
5. More recently, Ghana's payment system has witnessed
significant changes on account of the growing role of
Financial Technology Firms (FinTechs) and payment
innovations. A recent survey conducted by the Bank shows
that there are 71 FinTechs providing both front- and back-
end services to Ghana's banking sector. These developments
are broadly in line with the country's developmental agenda
of formalising economic activities through digitisation to
enhance growth prospects.
6. To further drive the transformation of financial systems,
partnerships between financial institutions and FinTechs
have enhanced the provision of digital payment products in
response to consumer demand. The development can also
be attributed to the on-going efforts by the Bank to promote
digital payments as an alternative to cash transactions with
emphasis on speed, convenience and efficiency.
7. Digitisation affects the way financial markets operate.
Financial Market infrastructure including securities and
settlement systems, trade repositories, card payment
networks, clearing and settlement of funds involves many
players such as gateways processors, payment aggregators
and merchants that are not subject to licensing by Central
Banks. The central Banks must have a clear vision on the
framework that will drive the process including the setting up
of infrastructure that could reach a wider segment including
the rural areas. The framework must also be interoperable
and ensure competition among the operators. It must also
include an appropriate financial consumer protection
framework to engender public confidence. Regulators are
therefore challenged to define their role in a constantly
evolving dynamic environment.
8. In response to that, the Bank has recently reviewed,
amended, and consolidated the existing payment systems
regulatory framework. The new draft Payment Systems and
Services Bill 2017, which has been approved by Cabinet and
being prepared for consideration by Parliament unifies
previous laws and guidelines relating to payment services
and e-money operations and sets the norms and standards
and regularize actors in the payment system space.
9. Broadly, the new Bill is expected to open up Ghana's digital
finance space to promote financial inclusion and help reduce
poverty. Among others, the new Bill seeks to promote
innovation in the design of payment products and services,
provide guidelines to FinTech operations and engender
competition in the e-money business. The Bill has also been
expanded to include provisions for cyber security regulations
and strict adherence to ICT standards and payment service
providers to the Data Protection Act 2012 (Act 843) would be
required of all market players.
10. Currently in Ghana, the range of payment service
providers has expanded to include mobile money operators
and FinTechs. These agencies work closely with the major
financial institutions to develop innovative and affordable
products for unbanked customers. The various products and
services on offer include online payment platforms,
Unstructured Supplementary Service Data (USSD) services,
mobile banking services, Quick Response (QR) codes, money
transfer services, deployment of Point of Sale (POS) devices,
transfers of inward remittances into mobile wallets and
agency banking.
11. An important channel for delivering financial services to
the underserved segments of the population at an affordable
cost is through the agent network which has grown by some
297 percent since 2015. To further deepen activities of the
agent network,
 The Bank is developing a digital Agent Registry in
collaboration with the financial services industry to
enhance the identification and oversight of these
agents. The new registry will interconnect with
Ghana's digital address system to provide unique
identification for agents and facilitate real-time
monitoring and tracking of agents. Furthermore, the
Registry will facilitate customers' access to a
preferred agent point by mapping agent locations
and also inform stakeholders if agents violate
regulatory and prudential requirements.
The Bank also promoted the payment of interest

on e-money float balances held by banks to
further scale up mobile money service usage and
promote financial inclusion.
 The Bank in collaboration with stakeholders has also
prepared Cyber Security Regulations for the
financial sector which will be launched next month to
address cyber security challenges in a digital financial
landscape.
12.
As part of the Bank's policy to transform the financial
ecosystem, the first phase of mobile money
interoperability project was implemented in May 2018.
Under the project, disparate mobile money platforms were
linked through the central switch to facilitate funds transfer
across mobile money networks. The integration with
interbank payment systems infrastructure is expected to
create an integrated and interoperable digital retail
payments ecosystem which will facilitate seamless funds
transfer across payment systems to promote financial
inclusion.
13. These developments in the Ghanaian payments system
landscape have not only increased security, affordability,
convenience and efficiency in digital financial services, but
have also worked to promote financial inclusion among the
country's financially underserved populations.
14.
Ladies and gentlemen, building a digital business and
financial ecosystem requires a strong and resilient financial
sector. It is against this background that the Bank has, in
recent times, instituted several policy measures including the
new capital requirement regime, introduction of new
corporate governance guidelines, fit and proper test
directives as well as transitioning to Basel II and III
regulatory framework to foster an enduring financial sector
which supports the country's economic growth agenda.
15.
In concluding, let me say that building a digital business
and financial ecosystem requires a robust financial sector. To
keep pace with innovation therefore, the Bank of Ghana will
continue to strengthen the oversight and regulatory regime
to support developments in the payment and settlement
systems. This would ensure safety, reliability, efficiency and
confidence in digital financial transactions to support the
growth agenda of the government.
16. Thank you.