DIRECTOR, FINANCIAL INTEGRATION

neversinkhurriedMobile - Wireless

Nov 12, 2013 (3 years and 8 months ago)

60 views



E. N EGBUNA (PhD)

DIRECTOR, FINANCIAL INTEGRATION

WEST AFRICAN MONETARY INSTITUTE (WAMI)



Being the text presented in the Panel discussion on Regulation of international Remittances and Central
Banks’ co
-
operation on Cross Border Mobile Payments

1

AGENDA



Introduction


What is Cross Border Mobile Payments and its
Significance to WAMZ and WAMI Mandate?


Overview of the situation and Current status of Mobile
Payments development in the WAMZ region.


Associated Challenges


The way Forward

2

1. INTRODUCTION
-

THE WAMZ PROGRAMME


The West African Monetary Zone consists of six
countries:


-

The Gambia, Ghana, Guinea, Liberia, Nigeria and
Sierra Leone.


The primary objective of the programme is the
establishment of an economic and monetary union of
the member countries.


The expected date for the launch of the Union is
January 2015

3

1. INTRODUCTION
-

THE WAMZ PROGRAMME


The West African Monetary Institute (WAMI) is the
Administrative Organ of the WAMZ Programme.



-

Undertakes multi
-
lateral surveillance exercises to

ensure the attainment of set primary and secondary

macro
-
economic convergence criteria;



-


ensures the attainment of structural and institutional

benchmarks;



-

performing activities that will lead to the

establishment of the:




West African Central Bank (WACB);


West African Financial Supervisory Authority; and


West African Monetary Zone Secretariat




4

1. INTRODUCTION CONTD.


About

300

million

mobile

phone

subscribers

in

Africa
-

the

WAMZ

accounts

for

about

half

this

number



New

technologies

offer

improvements

to

remittance

services

and

reduction

in

transactions

costs
:

mobile

phones

should

hold

the

greatest

promise

for

Africa



Remittances



Important

source

of

income

to

developing

countries

like

the

WAMZ
:


Poverty

alleviation


Stimulation

of

development



1. INTRODUCTION CONTD.



Most of the funds are sent through informal channels
with attendant risks


Most of the remittances fall outside the regulatory
monitoring scope


Money laundering


Exchange control monitoring



2.CROSS BORDER MOBILE PAYMENTS


WAMZ &
WAMI MANDATE
.






As a working definition,
cross border mobile
payment is a real time mobile payment, which is
crucial for both remittances(person to person),
and for formal/informal cross border trade
(business to business) transfers/settlements






7

2.CROSS BORDER MOBILE PAYMENTS


WAMZ &
WAMI MANDATE



Strong regional financial markets and institutions play
an important role in supporting economic development




The formalization and efficiency of cross border
remittance and trade flows is an important development
goal




WAMZ/WAMI


confronted with the promotion of cross
border mobile transfer, but not at the expense of
financial stability

8

3. CURRENT STATUS OF MOBILE PAYMENTS
DEVELOPMENT IN THEWAMZ


Slow rate of evolution of mobile payments resulting
from the following:



Shallowness of the financial system


Absence of a common regulatory framework within
the region


Formal barriers to the provision of payment and
transaction services by non banks


Formal and informal trade barriers


9

4. SOME CURRENT ACTIVITIES OF WAMI TOWARDS
PROMOTING THE WAMZ INTEGRATION AGENDA


ADB financed payments system development
project



The Gambia: Already live


Guinea: End December 2012


Liberia; End December 2012


Sierra Leone: End December 2012

10

4
. SOME CURRENT ACTIVITIES OF WAMI TOWARDS
PROMOTING THE WAMZ INTEGRATION AGENDA


Cross border banking regulation



Establishment of the College of Supervisors
(CSWAMZ), leading to:

Capacity building

Information sharing

Corporate governance

Harmonization of banking supervision processes

11

4. SOME CURRENT ACTIVITIES OF WAMI TOWARDS
PROMOTING THE WAMZ INTEGRATION AGENDA


Capital Market Integration



Progressing towards a common regional capital
market

Lower cost of capital

Increase access to capital

Stimulation of growth





12

4
. SOME CURRENT ACTIVITIES OF WAMI TOWARDS
PROMOTING THE WAMZ INTEGRATION AGENDA



Harmonization of supervisory and reporting
standards



Risk Based Supervision (RBS)


Implementation of eFASS technology

13

4. SOME CURRENT ACTIVITIES OF WAMI TOWARDS
PROMOTING THE WAMZ INTEGRATION AGENDA



Trade Integration



ECOWAS
-
WAMI joint task force on trade integration



ADB assisted national trade policies formulation for
The Gambia, Sierra Leone and Liberia

14

5. ASSOCIATED CHALLENGES



Development of non proprietary mobile banking
solutions


Removal of entry barriers to potential new
entrants with the attendant risk of disrupting
lucrative business models of banks and mobile
operators


Ensuring high levels of security and trust


Bank led/non bank led model?



15

5. ASSOCIATED CHALLENGES


Are Consumers adequately protected?


Fraud


Loss of privacy


Service failure



How does it impact stability in the banking
system and national/regional payments system?



Are payments and deposits adequately
distinguished?



Are there laws backing e
-
money issuance?

16

5. ASSOCIATED CHALLENGES



Are there legally backed agencies for cash
deposits and withdrawals?



How do we manage AML/CFT risks?


17

6. THE WAY FORWARD


Completion of the ADB funded payments system
development project in the WAMZ with the
possibility of the following adds
-
on



National Switch


Mobile money banking facilities
eg
, POS


Other e
-
banking channels



Installation of eFASS technology






18

6. THE WAY FORWARD


Capacity building

I.
WAMI

Cross border payments and integration issues:



Choice of model for the WAMZ

II.
CSWAMZ


Supervisory roles for cross border mobile payments

III
. Member states’ Central banks and
Telecommunications operators


Design of regulatory and legal framework

19

THANK YOU FOR YOUR ATTENTION


JE VOUS REMERCIE DE VOTRE ATTENTION