Banks, financial institutions without digital transformation strategy are behind – 2nd Dep Governor
Second Deputy Governor of the Bank of Ghana (BoG) Elsie Addo Awadzi has indicated that at this rate, any financial institution that has not already adopted and implemented a digital transformation strategy is already behind the curve.
She said the Rural and Community Banks (RCB) sector therefore cannot afford to wait much longer before it begins to leverage emerging technologies to modernise their business models to meet the fast-changing needs of their customers and to remain relevant to the segment of the economy that was traditionally served by the sector.
Speaking at the 21st Annual RCB CEOs conference on Friday October 14, she said it is noteworthy that under the ongoing Financial Sector Development Project, the Ministry of Finance and Bank of Ghana have agreed among other things to support the upgrade of the ARB Apex Bank’s e‐banking platform and the modernisation of the Management Information Systems of RCBs to help make their operations more efficient and to reach more customers with their services.
“I appeal to all RCBs to cooperate with the ARB Apex Bank in its roll-out of this new infrastructure for the benefit of your customers,” Madam Awadzie said.
She added “Digitalisation comes along with its own complexities and risks, including cyber security risks, third and fourth party/outsourcing risk, data privacy breaches, technology failure risk, increased AML/CFT risks, and consumer protection risk among others. Needless to say, a lot is required by way of strong governance and risk management systems to help mitigate these risks, as financial institutions seek to exploit the benefits of digitalisation.
“RCBs will therefore need to augment their capital base as needed in order to deploy more sophisticated systems and structures in line with the Bank of Ghana’s 2018 Cyber and Information Security Directive. The Directive provides for the adoption of minimum technical, governance, data protection protocols, and transaction monitoring and fraud detection and mitigation tools, to help mitigate key risks from digitisation.
“A second key area the RCB sector needs to look closely at in its quest to reposition itself, is governance. Several RCBs are yet to fully comply with the Bank of Ghana’s 2021 Corporate Governance Directive for Rural and Community Banks. The Directive seeks to promote higher standards of corporate governance and risk management to help strengthen the safety, soundness, and resilience of RCBs and ultimately the safety of
their depositors’ funds and our financial system.
“Good corporate governance is a shared responsibility for all key stakeholders. Shareholders of RCBs are required to contribute adequate capital to fund their banks’ operations, and must appoint directors who meet the Bank of Ghana’s Fit and Proper test and can effectively steer the affairs of their banks.
“RCB Boards of Directors must take their oversight responsibilities under the law very seriously. Let me remind you that membership of a Board of an RCB, or other entity for that matter, is not for personal prestige.
“It carries a significant burden of personal and collective responsibilities and liabilities. Among other things, Board members must put in place strategic plans that are well executed by management with appropriate risk management, transparency, and accountability.
“The Bank of Ghana finds it worrying that it continues to receive many petitions from whistle-blowers alleging serious acts of impropriety involving directors and senior management of RCBs. We expect that these would be a thing of the past as RCB fully comply with the Corporate Governance Directive.”
source:3news
