US-based EMTECH, a fintech platform for Central Banks said it has partnered with Global InfoSwift Consulting (GIC) to bring regulators closer to operators in the fintech ecosystem.
To achieve this, the partnership will bank on a capacity-building program focused on three core and interrelated areas; Central Bank Digital Currency (CBDC), Regulatory Sandbox Framework, and API and Open Banking. The capacity-building program is set to launch in the next 90 days.
The partners are expecting that the program will enable regulators, banks, and fintechs to accelerate the transformative changes seen in the evolving financial services regulatory environment.
While experts say technology innovation does not wait for regulation to evolve first, regulators are starting to play catch up with policies that seek to protect investors and users. The regulation also fosters new innovation as it builds confidence for new capital.
However, in creating regulatory policies, experts say there is a need for collaboration to enable those that will directly be impacted to understand and comply with the regulation. This collaboration also affects consumers as it often translates to improved quality products and services. This is why EMTECH and GIC have planned to engage key stakeholders across the fintech ecosystem.
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“EMTECH is pioneering a new approach as a fintech for central banks, and as such, also other financial services providers,” said Carmelle Cadet, founder, and CEO of EMTECH. “We are positioned to serve as a bridge between the regulator and regulated within the financial services industry by providing modern technology platforms and tools to enable an inclusive and resilient financial market. That’s been our mission. With that, we recognise the need to complement this by providing enhanced education and understanding of the impact of technological innovation on regulatory and policy approaches to the ecosystem players.”
The CBN earlier in the year set off the alarm clock in the financial services industry when it said it was launching its CBDC by October. The majority of the players have yet to wrap their heads around cryptocurrencies and there was the CBN planning to introduce CBDC. According to Cadet, many of them want to know how it affects their businesses in the long term.
Similar sentiments have trailed previous regulations released by the apex, like the Regulatory Sandbox, a framework set up by a regulatory authority like the CBN, that allows fintech firms and other innovators to carry out live experiments in a controlled environment under the supervision of a regulator.
Lack of understanding could see some operators decide to hold back their investment. It can have a negative impact on the businesses that go-ahead to implement without first getting clarity and using their knowledge to craft a better response and strategy.
Tunji Odumuboni, executive director, EMTECH Africa says the capacity program will provide deep and broad-based insights on CBDC, Regulatory Sandbox, and Open Banking. The programs have been selected because they represent the main pillars enabling regulators and innovative financial services providers with the tools to enhance financial inclusion while fostering the resilience of the entire financial market infrastructure.
“Our objective is to provide this Capacity Building Program to the entire financial services ecosystem in Nigeria,” said Afolabi Oke, founder and CEO of Global InfoSwift Consulting. “This means attracting all financial services regulatory agencies and all financial services providers, from commercial banks to fintechs.”
Adeola Azeez Independent Non-Executive Director Global Infoswift, says fintech is able to strengthen financial development, inclusion, and efficiency both domestically and globally.
“With this, it forces the modern financial community to face new challenges in regulation, in particular associated with data privacy, consumer protection, and operational risks. There is, therefore, a need to consistently build capacity as technology evolves, the partnership with EMTECH is very timely to enable us to bridge the knowledge gap within the financial ecosystem,” Azeez said.
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