CBS strategies fitting with government’s digital economy agenda |03 September 2021
In light of government’s strategy to move towards a digital economy, the Central Bank of Seychelles (CBS) has a fundamental role to play in modernising financial services and in creating an enabling environment for financial technologies (fintech) in Seychelles.
As explained by Financial Inclusion Analyst at the institution, Brigitte Lucas, in a press conference held yesterday, the Fintech strategy of the CBS, in addition to its modernisation plan, fits with the administration’s agenda towards a digital economy.
As government moves towards digitisation in the public sector, CBS will complement its efforts by modernising services within the financial sector, requiring the implementation of technological infrastructure. With the technological infrastructure, Fintech can be introduced into the financial services sector, and will open opportunities to develop electronic services while improving their use by consumers.
In support of the infrastructure, additional policies related to financial consumer protection, financial education, data protection, cyber security, reliable and affordable access to internet and network connectivity, access for finance for micro, small and medium enterprises (MSMEs), and promoting competition in the financial sector, will also be implemented by CBS.
With regard to its modernisation plan (2020-2023), CBS’ vision is to establish a National Payment System (NPS) that is convenient, affordable, reliable, efficient and safe through mobile-based digital platforms.
Thus far, the institution launched its digital financial literacy campaign and successfully managed to reduce the fees on the use of Seychelles Electronic Funds Transfer (SEFT) payment channels, and as a result the volume of transactions has significantly increased over the years. According to Ms Lucas, VISA has offered Seychelles its engagements that as of next year, fees for card transactions will be reduced.
Other works in progress include the discussions with stakeholders for the establishment of a body to manage payment platforms locally, a national ID system, introducing disincentives for using cash and cheques, and ensuring provisions for disaster recovery management.
In going forward, the institution’s focus is on undertaking research to enhance competition, incentivising digital payments, creating the necessary environment to allow Fintech and Payment Service Providers to have involvement to payment systems platforms. In addition, CBS will launch into discussions with the necessary entities for the introduction of Apple Pay, Samsung pay, and to consider the establishment and enhancement of payment systems infrastructure.
“At CBS, we have found it necessary to join government through this project to modernise the services in the financial sector. This includes the implementation of technological infrastructure, which will help us to move forward with these strategies. With these infrastructures, we can introduce fintech in our financial system, and it will also open up opportunities for us to develop electronic financial services, and increase the use of such services in Seychelles, by consumers,” Ms Lucas said.
“One important thing we want to mention, is that the success of the strategy is not reliant solely on the CBS or government, but it will also depend on the engagement of consumers, encouragement from the private sector to promote more technological services, as well as for commercial banks to introduce payment systems which consumers can use conveniently. Furthermore, for us to implement the plan, we will need the assistance of retail sectors, so we can move forward. This comprises working conjointly with government, the Seychelles Revenue Commission (SRC) and such, to ensure that this sector promotes electronic payments. It is important to mention that the strategy promotes financial inclusion in all sectors of the economy,” Ms Lucas noted.
With modernisation paving the way for Fintech, the strategy aims to enhance efficiency and effectiveness in the financial sector, increase access to finance, and reduce reliance on cash as the preferred medium of transaction, in support of the Seychelles economy, citizens and residents, businesses, and government.
Three pillars need to the strategy are necessary, the first of which is digital infrastructure encompassing the requisite ICT, payment systems, credit infrastructure and ancillary-enabling infrastructure to physically facilitate and adopt fintech transactions. Additionally, it is dependent upon the creation of a conducive and effective legal, regulatory and supervisory framework for Fintech, while mitigating risks and promoting financial stability, market integrity and consumer protection.
The third pillar, requires the development of the Fintech eco-system through government leadership and government payments and transactions, facilitating Fintech for MSMEs and financing and skills development to encourage Fintech supply and demand.
Governor of the CBS Caroline Abel noted that the advantages for the economy and economic players are that such strategies will accelerate economic growth, promote competition, enhance public service delivery, build resilience to economic and environmental shocks, and to transform the financial sector.