The Bank of Ghana (BoG) is advising all banks to seek partnerships with financial technology companies (fintechs), to provide services under one payment platform to reduce competition for financial services.
The BoG maintained that such a move will enable the banking industry to aggregate multiple products under a common payment platform and help to leverage the potential power of open banking through the use of Application Programming Interface (API).
Addressing industry players at the 23rd National Banking Conference by the Chartered Institute of Bankers (CIB) in Accra yesterday, Governor of BoG, Dr. Ernest Addison said, “stakeholders must seek to establish shared platforms and work collectively to promote merchant acceptance of digitized financial products and services, with particular emphasis on lower tier merchants, such as small and micro-enterprises to accelerate the digitization process. This will reposition the industry to compete as a unified force compared with the myriads of existing fragmented payment platforms”.
The Governor indicated that banks are not only competing among themselves with regards to financial services, but are also doing same with fintechs.
This, Dr. Addison noted, raises the stakes for banks to recalibrate existing business models to appropriately deal with the increased levels of competition or risk being outcompeted.
On sustaining the growth of the banking industry as a result of the current wave of digitization, the BoG proposes that the banking industry must, apart from partnerships with fintechs, also prepare consumers for digital finance, educate consumers on the essence of financial protection including the retooling of legacy systems and enhancement of employee skills sets.
President of CIB, Rev. Mrs. Patricia Sappor, emphasized that the financial industry is one of the many sectors that have been largely impacted by the increasing movement towards the digital path.
This, she said, is evident in the fact that new technologies and digital services continue to engrave themselves into financial services provision, thus transforming the industry and disrupting the traditional business models.
Topics which were discussed at the conference included, regulatory oversight in the digital age, opportunities and challenges for financial institutions in the digital age, the role of fintechs in the financial industry and the role of data protection in the digital age.
The conference theme was; ‘The Digital Age: Implications for Growth and Sustainability of the Financial Industry’.