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The Bank of Ghana (BoG) has adopted an integrated risk-based supervisory approach for digital financial services that helps avoid blind spots as a result of undue focus on institutions rather than on functional areas of operation and systemic risks, Second Deputy Governor Mrs Elsie Addo Awadzi has said.

In particular, she explained, approvals of products, services, and technology outsourcing arrangements proposed by banks and non-banks or FinTechs are reviewed in a holistic manner by relevant Departments from various perspectives including prudential, market conduct, financial integrity, and payment systems risk perspectives.

The use of Suptech to automate data collection and analytics on a disaggregated basis first which was introduced in 2018 for electronic money issuers, has more recently been augmented under the artificial intelligence powered Online Regulatory and Analytics Surveillance System (ORASS) to cover all banks and other licensed financial services providers under the Bank of Ghana’s regulatory perimeter, she explained.

“This is critical for supervisors in identifying trends and early warning signs for early supervisory interventions when necessary.

“Strong cooperation with key stakeholders provides the Bank of Ghana with valuable insights and perspectives in its regulation and supervision of digital financial services.

“In particular, representation of banks and FinTechs on the Payment System Advisory Committee helps to facilitate open and transparent exchange of information without impairing the independence of the Bank of Ghana and helps to build consensus among key players on policies to help contain systemic risks, reduce costs, and encourage competition.

“The Bank of Ghana also maintains strong cooperation with key domestic policymakers and regulators bilaterally and at the level of the Financial Stability Council whose mandate is to promote regulatory cooperation, financial system-wide risk mitigation, and crisis preparedness.

“Ghana’s experience as I have summarized above, demonstrates some of the challenges that regulatory policy and supervision are called upon to address to help create an enabling environment that supports innovation in financial services delivery while containing systemic risks.

“The future of financial services is more digital than ever before, and policymakers and regulators must be able to anticipate and catch up with the rapid disruptions which continue to blur the fine lines between financial services and technology. Balancing the potential benefits and risks is a moving target and closer collaboration with domestic, regional, and international stakeholders is critical to ensuring that the right balance is achieved at all times,” she said while speaking at a joint AFW2/MCM virtual regional workshop on the theme “Building Fintech resilience and supervisory capacity in west Africa.”


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