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Expert lists safeguards to e-banking
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Nigeria is moving towards a new paradigm in online banking and the potentials for growth, convenience and global reach are huge. Still, to draw the most on this promise, the country must ensure that the safety and soundness of the banking and payments system is not compromised said Anil Kumar Sahai, Head AITEC Consulting Services, who spoke at the African Banking Technology Conference in Lagos.
Sahai said that other standards that must be upheld included ensuring that the efficiency of the financial system as payments mechanism and intermediation system is maximised.
Also, he noted, the system must see to it that broader access to appropriate, affordable financial services is promoted and that the financial system is not compromised by its abuse for criminal or terrorist financing purposes.
Furthermore, consumers, especially the more vulnerable, must be protected against abuse and loss, he stressed.
Sahai said that for online banking to thrive in Nigeria, there must be a blend of legal and regulatory openness, the opportunity to start up and experiment as well as sufficient legal and regulatory certainty for investments.
"Countries with low levels of effective regulation may be very open but highly uncertain, since regulatory discretion may lead to arbitrary action. Conversely, countries with greater certainty may be less open, in that the types of entity and approach allowed to start up are restricted."
In a new market sector like mobile banking, where business models are not yet stabilised, enablement in the policy and regulatory sector means a move towards greater certainty and greater openness, he noted.
In his presentation at the event, Valentine Obi, CEO of eTransact Global observed that the global payment industry has experienced tremendous changes influenced largely by technology advancements, a more sophisticated customer base and a high rate of global economic growth.
He added that these formerly cash based economies had since moved into diversified payment systems, that they were now enjoying the benefits , and that Nigeria and other developing countries must follow suit.
Obi noted that there was a need for Africans to trade among themselves without having to first exchange their currencies to any hard currency and that more value would be created for all parties involved in inter-country trade when the method was fully exploited.
"Increased trade and settlement among these countries will generate, spur and impact most of the African economies positively. A World Bank report on the current West African trade route estimates the value of transactions to be over $8 billion and most of the transaction -informal".
He concluded:"Technology is the tool that puts us at par with the developed nations and with which we can also leapfrog the west easily."
Sahai said that other standards that must be upheld included ensuring that the efficiency of the financial system as payments mechanism and intermediation system is maximised.
Also, he noted, the system must see to it that broader access to appropriate, affordable financial services is promoted and that the financial system is not compromised by its abuse for criminal or terrorist financing purposes.
Furthermore, consumers, especially the more vulnerable, must be protected against abuse and loss, he stressed.
Sahai said that for online banking to thrive in Nigeria, there must be a blend of legal and regulatory openness, the opportunity to start up and experiment as well as sufficient legal and regulatory certainty for investments.
"Countries with low levels of effective regulation may be very open but highly uncertain, since regulatory discretion may lead to arbitrary action. Conversely, countries with greater certainty may be less open, in that the types of entity and approach allowed to start up are restricted."
In a new market sector like mobile banking, where business models are not yet stabilised, enablement in the policy and regulatory sector means a move towards greater certainty and greater openness, he noted.
In his presentation at the event, Valentine Obi, CEO of eTransact Global observed that the global payment industry has experienced tremendous changes influenced largely by technology advancements, a more sophisticated customer base and a high rate of global economic growth.
He added that these formerly cash based economies had since moved into diversified payment systems, that they were now enjoying the benefits , and that Nigeria and other developing countries must follow suit.
Obi noted that there was a need for Africans to trade among themselves without having to first exchange their currencies to any hard currency and that more value would be created for all parties involved in inter-country trade when the method was fully exploited.
"Increased trade and settlement among these countries will generate, spur and impact most of the African economies positively. A World Bank report on the current West African trade route estimates the value of transactions to be over $8 billion and most of the transaction -informal".
He concluded:"Technology is the tool that puts us at par with the developed nations and with which we can also leapfrog the west easily."
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