. a further key regulatory consideration is to support initiatives that could assist in easing frictional costs, within the system and the economy, and to respond to the need for all interbank payments to be processed and finalised in near real - time. cybersecurity there is no doubt that cyber - threats have increased substantially over the past few years. as technology evolves and is more widely embraced and become more world economic forum ( wef ). 2017. ‘ balancing financial stability, innovation, and economic growth ’. available at http : / / www3. weforum. org / docs / ip / 2017 / fs / wef _ whitepaper _ fsieg. pdf. page 5 of 9 accessible, criminal activity is rapidly expanding to the cyber - world. the source of this threat vector is both privately and state - sponsored - the latter is far more difficult to counter. cybersecurity and strengthening resilience across the entire value chain is therefore non - negotiable. in response to this reality, the sarb hosted a cybersecurity conference with the theme of ‘ collaboration for building cyber - resilience ’ last year. the conference was an important event for creating a platform to share experiences from both global and local stakeholders, creating awareness and a common understanding of the fundamental issues, and assisting in determining the deficiencies that needs to be addressed. through this payments innovation conference, we will also explore payment threats and security interventions in the digital age, with a focus on the analysis of emerging threats in the payments domain and counteracting threats ( the tactics, tools, and techniques ) in order to remain safe and secure in the digital age. it is important to recognise that, in an interconnected world, one is only as safe as the weakest link. it is, therefore, crucial for us to think about how to strengthen the resilience of the wider financial system. developments in regulations and policy objectives the south african reserve bank act 90 of 1989 ( sarb act ) bestows the mandate of ensuring the efficiency, safety and soundness of the entire payments value chain and related matters on the sarb. aligned to this mandate in the sarb act is the enabling legislation, namely the national payment system act 78 of 1998, which ‘ ‘ provides for the management, administration, operation, regulation and supervision of the payment, clearing and settlement systems in the republic of south africa 8. in the quest to execute this mandate, the sar

##s devices per 100 000 citizens to close to 2 000. this vividly demonstrates the potential of fintech to broaden the network and deepen inclusion. other benefits that innovation may bring about include, operational simplification, counterparty risk reduction, clearing and settlement time reduction, liquidity and capital management improvement and fraud minimisation. it should, however, be recognised that while these developments present tangible benefits, they may also give rise to certain challenges, including, but not limited to issues related to privacy as well as regulation, criminality and law enforcement. given this reality, a balance necessarily need to be struck when developing regulatory frameworks. ‘ the future of financial services : how fs : h disruptive innovations are reshaping the way financial services are structured, provisioned and consumed ’. an industry project of the financial services community. fsc. prepared in collaboration with deloitte final report, june 2015. available at http : / / www3. weforum. org / docs / wef _ the _ future _ _ of _ financial _ services. pdf. page 4 of 9 the innovation trade - off the possible benefits of innovation are numerous and broad, and those that are often touted relate to costs, convenience, and speed. big data and information analytics that allow financial intermediaries to understand and cater to their customers ’ needs at an individual level presently exist and already in wide use. these developments have the potential to lead to advances in risk management, credit extension processes and an economy that potentially makes less use of cash. the inclusion of previously under - and unserved consumers into formal financial services through the introduction of novel and bespoke products is a promising and welcome development. as stated above, the pursuit of these developments, in the absence of appropriate and sound regulatory frameworks, could lead to the emergence of new risks. as an example, with these advances in technology, some of the platforms and systems have moved to the cloud. this is compounded by the rapid improvements and usage of mobile devices. a wef white paper highlighted that in order to improve risk management, it is important to highlight that the right tools should be used, including : 7 a. data on the emerging new innovation and its potential impact ; b. assessment tools for the systemic risks introduced by innovation ; c. a more standardised regulatory treatment framework for new competitors across jurisdictions ; and d. an improved mechanism for public - private cooperation to combat cyberattacks