Now the South African Reserve Bank (SARB) has established a fintech programme to track and analyse developments, South Africa has all that is required to become a fintech centre of excellence.
That’s according to Dominique Collett, senior investment executive at Rand Merchant Investment Holdings and head of AlphaCode, a club for fintech entrepreneurs.
“We have an advanced banking and financial services system with a sound regulatory regime. We have extremely competent regulators, top entrepreneurial talent and innovative businesses that are attracting considerable local and global investments,” said Collett.
“The missing puzzle piece was a regulator focused on the fintech sector which has now been put in place, so there is no reason why South Africa cannot follow the UK and Singapore in becoming a fintech centre of excellence.”
Collett said she was looking forward to seeing active engagement with the community via the SARB’s fintech programme, adding she would like to see more pilots and initiatives move rapidly through the regulatory sandbox.
Marius Reitz, Country Manager at Luno, a platform which allows you to buy, store and learn about digital currencies like Bitcoin and Ethereum, said regulation ultimately brings clarity to businesses and consumers.
“It helps keep out fraudsters, charlatans and other operators with low concern or capabilities to keep customer information and money safe,” he said.
“We’ve seen that regulation can have an extremely positive impact. It may even result in even more talent and investment capital flowing into the industry, unlocking further business models and bringing additional advanced products to market.”
Luno has thus far followed a route of self-regulation.
“We follow the laws, regulations and guidance that apply to existing industries such as financial service providers and banks in South Africa. Since we were established, we have always emphasised regulatory compliance and consumer protection. We have put in place advanced KYC, AML and ATF measures to mitigate risks, and respond to threats and suspicious activity,” Reitz said.
Regulatory challenges the SARB fintech unit will need to address include the rise of cryptocurrencies.
“People are trying to figure out whether cryptocurrencies are a store of value, a payment mechanism or a currency and this has introduced debate into the system. We don’t know where this sector is heading as it’s a nascent technology that we are still figuring out,” Collett said.
The other major challenge includes cybersecurity and fraud. Customers are increasingly operating in a digitised economy and enjoying the convenience that the digital revolution brings, but at the same time need to be protected from the risks that this increasing digital economy brings and the level of sophistication of cyber criminals.
Thomas Reisenberger, regulations lawyer at Legalese, said South Africa was at a watershed moment when it comes to establishing itself as a fintech centre of excellence.
“Comprehensive regulation and guidance relating to the predictable use of fintech has been missing in South Africa. Credit must be given to the South African regulators who have called for role-player involvement and input. Together, regulators and role-players will design a legal system from ‘grass roots’ level to bring about the most effective and positive developments in the sector,” he said.
Collett said the SARB initiative was very important because of the changing face of financial services driven by technology, the rise of social media and the change in consumer demographics and behaviour particularly those of millennials.
“The regulator needs to consider how to deal with this evolving space. Fintech is an enabler and not a threat to making financial services more relevant to a changing society. The SARB initiative will help to bridge this gap,” she said.
The post AlphaCode calls on SA to become fintech centre of excellence appeared first on Disrupt Africa.
from Disrupt Africa https://ift.tt/2I9yCtV