Financial technology is of great interest to any financial institution in the world. In this day and age, no bank can afford to miss out on big innovation and improvements. South Africa’s central bank acknowledges now is the time to finally take a step forward. As such, they have officially launched a full-time fintech united. A smart move by the South African Reserve Bank, even though this is just a three-man team.
It is a good time for the South African Reserve Bank to focus on fintech. We have seen a lot of innovative ideas over the past few years. With a few years of trial and error behind us, the proper projects will finally come to market soon. It is of the utmost importance any bank gets their finger in the proverbial fintech pie. Creating a dedicated fintech unit is a big step forward in this regard. Even though it’s just a three-man team, the road to innovation is wide open for the Reserve Bank.
South African Reserve Bank Embraces Fintech
In South Africa, we see a rapidly growing fintech ecosystem. Ignoring the fintech industry is no longer a viable option for the Reserve Bank. It is best to face the new innovative challenges and opportunities head-on. Especially with the potential disruption taking place soon, things will evolve at an accelerating pace. A lot of products and services will look very different in a few years from today.
Deputy Governor Francois Groepe comments:
“A key task of the new unit is to address the policy implications that arise from fintech developments. We as the Sarb favour a ‘back to basics’ approach. Regulators should focus on regulatory principles that are risk-based, rather than creating excessive rules-based regulations aimed at these technologies or products.”
It will be interesting to see what the future holds for the South African Reserve Bank. This new focus on fintech will eventually pay dividends. Especially with the industry growing so quickly, big changes will come to the financial sector sooner rather than later. We already see digital-first competitors such as Bank Zero and Discovery Bank. At the same time, there will be regulatory implications to take into account. How that will play out, remains to be determined.
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