Digital Finance Week 19-23 September 2019 African Development Bank CCIA Building Room 1G & 1H Abidjan, Cote d Ivoire Session: Digital Financial Services and AfDB Operations How can digital technology and DFS help promote payment systems integration? What is the link between DFS and the Bank s Hi 5s? (Monday 19 September 2016, 14:00 15:30) Talking Points Gabriel V. Mougani Chief Regional Integration Economist ONRI, African Development Bank Group (AfDB) 1
Outline Introduction Opportunities Key challenges Link between DFS and the Bank s Hi 5s Conclusion 2
Introduction Good afternoon distinguished Guests and colleagues, Let me start by thanking OFSD and the MFW4A Partnership for offering ONRI the opportunity to share our views on the role of digital technology and DFS to promote payment systems integration and cross-border financial services; and on the link between the DFS and the Bank s Hi 5s. Digital technology and DFS have significant potential to connect domestic payment systems and provide a range of affordable, convenient and secure cross-border financial services in Africa. 3
What are the opportunities? Opportunities According to the GSM Association, Africa had 557 million (about 50% of the population of the continent) mobile-phone users at the end of 2015 and almost 84 million of them still pay by cash. Transformative innovations in digital technologies are significantly contributing to low value mobile and digital cross-border financial transactions. Digital Technology is also simplifying: the rapid move from mobile money to DFS the increasing convergence of mobile and banking services the connectivity of domestic payment systems and will help to achieve the vision of a continental integrated payment system. 4
Key challenges [1] What are the key challenges? Digital technology and connectivity is key, but it is only a starting point for a successful integrated payment system (at the national/ regional & continental levels). It is very important to strengthen other factors that interact with technology - in order to make digital technologies and DFS contribute to promote payment systems integration. First. At the policy level: prioritize digital solutions as the most promising approach to making access to DFS affordable for all and at the regional/continental levels. 5
Key challenges [2] Second. At the technical level (the core infrastructure): Make the digital payments ecosystem interoperable to ensure that the products and services are linked not only within a country but also across borders. Third. The regulatory requirements. Develop and implement a regulation and supervision that balance ITenabled innovation, enhanced competition and protection of customers against fraud, terrorism finance and money laundering. Fourth. The need of collaboration among financial, telecommunications and competition authorities 6
Key challenges [3] 5. The account-to-account interoperability issues 6. The telecommunications network access issues. 7. The Customer data and risk-based financial services. 8. Efficiency of business models 9. Coordination of exchange rate policies and exchange regulation policies 10. Alignment of different stakeholders 7
Key challenges [Summary] (Alignment of Alignment of different stakeholders Customers & Civil society Digital technology Providers Central Banks & Regulators Donors, Development partners Policymakers MNOs, Banks, Financial Institutions Other stakeholders 8
Link between DFS and the High 5s o Improved Mobile channels for energy access o Building of a digital ecosystems for farmers & other rural dwellers (e.g. mfarmer Mobile services) o Positive impact on agriculture development o Reduction of costs of transformation of basic products o Promote payment systems integration o Improved regional financial flows (including e- commerce, remittances) o o o Financial services at low cost Financial services accessible to underserved Use of Mobile in improved education, health & sanitation access, etc. 9
Conclusion To conclude, I would like to emphasize that, digital technology and connectivity, sound DFS ecosystems, regulations and supervision, interoperability among banks, MM providers and other players, will contribute to accelerate the integration of domestic payment systems and to achieve the Bank s High 5s. Thank you. 10
Thank you Contact details: Gabriel V. MOUGANI Chief Regional Integration Economist Tel: + (225) 20 26 26 42 Mobile (Corp.): + (225) 79 15 17 93 Skype : gabriel.mougani2 African Development Bank NEPAD, Regional Integration & Trade Department (ONRI) Immeuble CCIA Bureau 12M Rue Jean Paul II Plateau 01 - BP 1387 Abidjan 01 Cote D Ivoire Email: g.mougani@afdb.org Website: www.afdb.org afdb_acc African Development Bank Group AfDB_Group