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