Fintech policy must be inclusive, MPs hear | Fin24
  • Credit Rating

    'I think Moody's will be happy' - President Ramaphosa says plan to deal with Eskom's debt is imminent.

  • 'No Basis in Fact'

    The PIC commission has slammed Iqbal Survé’s claims about Minister Pravin Gordhan.

  • Fin24’s newsletter

    Sign up to receive Fin24's top news in your inbox every morning.


Fintech policy must be inclusive, MPs hear

Nov 21 2018 20:59
Lameez Omarjee, Fin24

Fintech policy that is adopted should be geared towards financial inclusion, members of Parliament have heard. 

On Wednesday, representatives from Treasury and the Prudential Authority briefed the Standing Committee on Finance on fintech and its role in supporting financial inclusion.

Fintech, or financial technology, is new technology used to improve the delivery of financial services.

Broader access

National Treasury's 2011 policy paper 'A safer financial sector to serve South Africa better' points out that new technologies and innovative approaches to reduce costs and broaden access to financial services have benefited South Africans who previously did not have access to financial services.

An Intergovernmental Fintech Working Group has been set up, and includes representatives from Treasury, the SA Reserve Bank, the Financial Sector Conduct Authority, and the Financial Intelligence Centre, among others, who are working to put together a policy for fintech and innovation in the financial sector, MPs heard.

According to Treasury, fintech has the benefit of providing consumers with access to financial products, offering greater flexibility, speed of delivery and services and competitive pricing.

Treasury noted that fintech innovations should not create an un-level playing field to negatively affect competition – and considerations should be made to ensure consumers understand the financial products available.

No quick fix

Although fintech can bring down costs and broaden access to financial services, it is not a "quick fix" solution for financial inclusion, according to Treasury.

To ensure that fintech is supportive of financial inclusion, there are three provisions to be made by policy.

The first relates to effective consumer protection oversight. A policy supporting fintech should be aware of the risk of excluding those who are digitally less literate or who do not have access to digital platforms, Treasury explained. Regulators must ensure that the financial products and services are appropriate to the needs of markets. Security measures must also be in place to safeguard against threats which may rise because of innovation such as fraud, according to Treasury.

The second provision relates to consumer education of the digital age – consumers need to be aware of their rights and responsibilities as they engage with financial service providers. Fintech presents an opportunity to "harness" new technologies to improve consumer financial education and awareness, according to Treasury.

Thirdly, there must be regulation – there must be coordination between policymakers, central banks, financial supervisors, regulatory authorities and financial ombudsmen, MPs heard.

* Sign up to Fin24's top news in your inbox: SUBSCRIBE TO FIN24 NEWSLETTER

sarb  |  treasury  |  fintech  |  finance


Company Snapshot


Struggling power utility Eskom will take centre stage at this year's mini budget

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...

Voting Booth

What do you think about private healthcare in SA?

Previous results · Suggest a vote