Be proactive in securing digital channels – BoG to banks

Governor of the Bank of Ghana (BoG) Dr. Ernest Addison has charged banks, and by extension other financial services providers, to consolidate the regulator’s efforts at strengthening the digital finance ecosystem by adopting a proactive posture toward improved security of their channels.

This, he suggested, will accrue to the benefit of all stakeholders, seeing the rapid and consistent shift in consumer preference toward branchless banking coupled with its inherent risks.

The Governor said this in remarks read on his behalf by the Head of Banking Supervision at the central bank, Osei Gyasi, at the launch of Republic Bank’s credit card.

“The BoG has provided a supportive directive, regulations policies, and guidelines on cyber security to safeguard the financial sector; but banks must also be proactive to strengthen the general risk management framework, as well as build a robust and secure digital infrastructure to forestall incidents of cybercrime.

“It is also essential that comprehensive and stringent KYC procedures are implemented. These will help reduce money laundering, terrorist financing and credit card fraud through the banking sector,” he stated.

Among the measures undertaken by the regulator to support the transition toward digital-first banking is introduction of the Payment Systems and Services Act 2019 – which gives a legal framework for payment systems and payment services, and regulates institutions that carry out payment services and electronic money business.

Others include the Cyber and Information Security directive as well as the setting-up of a dedicated FinTech office at the BoG.

The Governor lauded Republic Bank for its launch of the credit cards, which he said will deepen financial inclusion as it will afford customers the opportunity to widen their options for deferred payment – and also provide a detailed credit history for the customer that can also serve as a reference point to access other credit facilities.

“I would like to encourage Republic Bank to monitor and keep records of the performances for credit reporting purposes, and to engender the development of a credible credit database for our banking industry,” he added.

With credit cards, in particular, being susceptible to cyber fraud attacks, Dr. Addison tasked the bank to ensure that the integrity of consumer data is protected at all times.

Fantastic Four

On his part, Managing Director of Republic Bank, Farid Antar, said introducing the four credit card products is consistent with the bank’s strategy of increasing financial intermediation through the application of technology, and is in line with government’s cashlite agenda.

He added that the bank is on a mission to change the misconception that credit cards are a preserve of High Networth Individuals (HNI) only, by making them available to persons earning a modest income as well as providing a first-to-market option for businesses.

“We seek to promote the cashlite lifestyle as seen in many advanced countries in the world and as driven by the Bank of Ghana and government of Ghana. The only way to do this is to make cashless transaction facilities available and affordable,” he stated.

It is estimated that at the end of 2021, the number of credit cards – a financial instrument with a preset limit issued by banks that allows for cashless transactions and emergency expenditure – was 2.8 billion, according to the data aggregation platform Statista.

Credit card penetration in sub-Saharan Africa remains at less than 10 percent on average, with only Namibia (11 percent) and Mauritius (23 percent) surpassing the mark. Ghana, according to Statista, has a 4 percent credit card penetration rate.