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1 INTRODUCTION
The provision of financial services is being revolutionized worldwide by technology-driven innovations. This ongoing process, known as FinTech, is described as “technologically enabled financial innovation that could result in new business models, applications, processes, or products with an associated material effect on financial markets and institutions and the provision of financial services” (FSB, 2021).
Thus, it transcends the mere adoption of new technologies to encompass broader changes in how financial services are delivered, the emergence of new players, and the blurring of lines between regulated and non-regulated services and products. At the same time, FinTech developments have proven to be useful tools for the promotion of financial inclusion, by increasing the reach of financial services providers, lowering the costs of products and services, and enabling access to those lacking prior experience with financial institutions, a role acknowledged by AFI in the Sochi accord.3 and lending services, with a varying scope and maturity across the region. Responses or approaches to FinTech by supervisors reflect the different levels of FinTech development and regulatory frameworks.
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The goal of this policy framework is to provide a systematic guide to supervisors in the Africa region to develop coherent supervisory approaches and policies towards FinTech firms, products, and services, compatible with the key objectives of inclusive finance, financial stability, consumer protection, and market integrity. It has been prepared from information provided by AFI members in the region, relevant guidance by Standard Setting Bodies, and industry and thematic thought contributors.
Find out moreSochi Accord on Inclusive Fintech
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Therefore, across many jurisdictions, FinTech innovations are providing a rather unprecedented fast-paced access to formal financial services for large populations of the underbanked and unbanked.
For supervisors, these transformations, speed and scope are creating challenges and introducing new complexities in their tasks.
The Africa region, as described in section two, has a very dynamic FinTech scene, especially in payments
3 Alliance for Financial Inclusion. 2022. Sochi Accord FinTech for Financial Inclusion. Available at: https://www.afi-global.org/wp-content/ uploads/2022/09/Sochi_Accord-22_stg3.pdf
