Fintech
Navigating regulations for fintech innovations
Fintechs are dynamic entities that require a deep understanding of the regulatory landscape. Cutting-edge innovations often push boundaries, making compliance a challenge. By mastering regulations, fintech companies can ensure their disruptive ideas find a safe and responsible path to market, driving growth and positive change in the financial sector.
To the African Fintech Summit 2024, a panel discussion featured Dr. Patrick Olomo, Senior Economist at the African Union (moderator); Kwame Oppong, Director Fintech & Innovation at the Bank of Ghana (virtual); Ahmed Monir, Director General of the FinTech and Innovation Department and Head of the Regulatory Sandbox at the Central Bank of Egypt; Wycliffe Shamiah, chief executive of the Capital Markets Authority; and Magalie Gauze-Sanga, founder and CEO of Koree, Cameroon. They discussed strategies to master the regulatory landscape for cutting-edge fintech innovations.
Experts have observed that the traditional financial regulatory system is static and cannot effectively serve the dynamic nature of fintech business. They highlighted several strategies to ensure a favorable regulatory environment to support innovation in the financial ecosystem:
Pan-African Regulatory Sandbox: The panel called for the introduction of a pan-African regulatory sandbox to promote innovation while ensuring regulatory coherence and consumer protection across the diverse regulatory environments of African nations. A pan-African regulatory sandbox would help fintechs expand more easily across countries, eliminating the need for a lengthy country-by-country approval process.
Involve regulatory bodies promptly: Speakers advised fintechs to engage regulators early in the development process to navigate the complex regulatory landscape, ensuring compliance, promoting innovation and building trust with both regulators and consumers. This proactive approach can lead to more effective and sustainable financial products.
Collaborations: Experts advocated collaboration among fintechs to create an enabling regulatory environment essential to foster innovation, ensure compliance and promote sustainable growth in the fintech sector. Fintechs could collaborate by forming lobbying alliances, developing industry standards and protocols, and participating in joint regulatory sandboxes.
Tailored approach: Speakers encouraged a tailored approach in fintech regulation, involving customized regulatory frameworks that address the needs, risks and specific characteristics of different fintech innovations. This approach contrasts with a “one size fits all” regulatory model.
Monitoring: Experts have advised regulators to ensure effective monitoring of fintech activities to identify areas in need of regulation. They argued that timely regulatory monitoring would ensure compliance, protect consumers, maintain financial stability and promote sustainable innovation. Monitoring fosters a collaborative environment where fintech companies can thrive by adhering to regulatory standards, ultimately contributing to a robust and inclusive financial ecosystem.
The Africa Fintech Festival is the flagship event of the Africa Fintech Network, with previous editions held in Nigeria (2018), Uganda (2019) and Mauritius (2021). It serves as a vibrant convergence point for industry leaders, technology enthusiasts, innovators and policy makers, offering a dynamic platform for dialogue, collaboration and knowledge exchange.