The South African Reserve Bank (SARB) has established a FinTech unit to research and recommend policy frameworks for the FinTech sector, among other responsibilities. The announcement was made by Francois Groepe, Deputy Governor of the South African Reserve Bank, at the 13th BCBS-FSI high-level meeting for Africa earlier in 2018.
According to Groepe, the setting up of the FinTech unit is in reaction to the rapidly changing FinTech sector.
"The SARB has recently decided to establish a FinTech Unit, with three dedicated full-time staff members that report directly to me. This unit is required to strategically review the emergence of FinTech and assess the related use cases. Its primary responsibilities are expected to include the facilitation of the development of appropriate policy frameworks for the SARB across the FinTech domain. This will be done by robustly analyzing both the pros and the cons of emerging FinTech innovations as well as the appropriate regulatory responses to these developments," said Groepe.
The SARB has been, as far as central banks in Afrika are concerned, at the forefront of investigating and looking into emerging financial technologies in recent years. While central banks in Kenya, Namibia and Nigeria have denounced cryptocurrencies, the SARB, without denouncing nor endorsing cryptocurrencies, went ahead in 2016 and became the first in Afrika to circulate a smart contract on an Ethereum based blockchain private network. The bank has also hinted at the possibility of a "blockchain based, digital version" of the South African Rand (ZAR).
"The rapid adoption of new and emerging technologies increases the possibility of technology and systems failure. Customers are demanding real-time and remote access to financial services while institutions are sharing data more freely and more frequently; this consequently creates additional opportunities for cybercriminals. Increased access along with the rise in blockchain technologies increases the number of entry points for cyber
attackers. As interconnectivity increases the attack surface for cyber-hackers into financial systems, institutions need to develop a more detailed understanding of mobile, cloud, Big Data, and security technologies. Authorities should persist in
increasing collaboration with industry players to ensure that integrity, security, and privacy are all part of the design, operation, and development process of innovations," added Groepe.