Your Excellency, Mr. Tiemoko Meyliet Kone, Governor Central Bank of West African States (BCEAO), speakers and participants from AFI member institutions, colleagues from BCEAO, AFI team.

Good morning, good afternoon, good evening and a warm welcome to the BCEAO-AFI Virtual Member Training on Digital Financial Services Interoperability. Apologies on behalf of Dr. Hannig who is unable to be with us today as he is on leave.

Let me start by thanking Central Bank of West African States (BCEAO) for co-hosting this virtual Member Training. We had agreed upon this training early in the year, of course, as an in-person event which we now have to deliver virtually. Thanks to BCEAO and to all AFI member institutions represented here, for embracing this change and continuing to support the virtual delivery of the training with your overwhelming response.

Peer learning is core of AFI’s learning model and virtual platform has some limitations on that.  Thanks for adjusting to this changed situation and making the most of it through digital learning platforms.

It is appropriate that this training is being co-hosted with  BCEAO it is implementing a one-of-its-kind regional interoperability project to enable all types of financial accounts be interoperable across all eight countries in West African Economic and Monetary Union (WAEMU). This project envisages banks, MNOs, MFIs and FinTechs to become part of the payment’s ecosystem in the eight West African States. The project aims to not only foster increased financial inclusion in the WAEMU region but also increased trade and cross border transactions. This training is important for all us as it comes at a time when there sever limitations to use of cash and physical contact. It is therefore important that systems are interoperable if we are to reach the poor.

Recognizing the importance of interoperability in building truly inclusive digital ecosystems, the leaders directed AfPI to provide policy and regulatory guidance for implementing digital financial services interoperability in Africa. AfPI’s Expert Group on Financial Inclusion Policy (EGFIP), developed the Framework for Digital Financial Services Interoperability in Africa in 2018. The framework anchors on three key pillars namely:

1. Regulation
2. Infrastructure; and
3. Market Aspects.

In addition, cooperation and collaboration is a cross-cutting theme across all three pillars. We believe that the framework will provide practical policy and regulatory recommendations to the regulators for building interoperability within and across countries. This is the second capacity building event that is being held on this framework.

Globally, there is a growing recognition that economic growth can be stimulated by deepening financial intermediation, which in turn helps to increase access to and use of a broader range of financial services. In this global endeavor, digital platforms offer immense promise to scale up access to financial services, while reducing cost and other physical barriers to achieving financial inclusion.

It is said that financial inclusion starts with payments because payments alone serve as a gateway to other financial products and services such as credit, savings, insurance. This realization alone has given rise to a number of initiatives by governments across the world, all aimed at driving small-value, high volume retail payments. For the people who are excluded from formal financial systems, retail payment flows are in the nature of G2P payments, wages and remittances sent by their family members living in other cities or even overseas.

In the last several years, there have been rapid technological innovations in payments space giving rise to new business models, new typologies of products and new delivery mechanisms. While all of these innovations augur well for the future, there is a heightened possibility of fragmentation in the market at the level of providers. Such fragmentation might give rise to unfair competitive practices and might therefore be detrimental to the overall efficiency of the payments services. It is therefore imperative to foster a regulatory mechanism that promotes interoperability of payments and other financial services across products and across different types of providers. Added to this is the need to bring in standardization of market practices, operational rules, legal aspects and technology standards.

The need for interoperability of financial infrastructures is felt even greater in the current times of cross-border payments and remittances. With a growing number of tech-enabled business providing services for cross-border transfers and remittances, regulators are further compelled to look at interoperability so as to provide a level playing field while at the same time mitigate risks such as customer protection, data privacy, integrity and reliability.

Digital financial services are an effective mechanism to enhance women’s financial inclusion. However, as global data suggests, the gender gap in financial inclusion continues to persist in almost all regions. In fact, it has become further pronounced in some countries. AFI has been guiding the members in developing gender-centric policy and regulatory framework to ensure that women are not left behind as a result of any of these initiatives. These concerns hold true while developing interoperability frameworks.

I would like to conclude by emphasizing that creation of inclusive digital economies hinges considerably on building efficient cost-effective, scalable and robust payment systems.  This can most certainly be achieved by putting in place an interoperability mechanism that on the one hand, spurs private sector innovation, but at the same time, also provides a level playing field and promotes healthy competition. All this requires a coherent, comprehensive, cooperative and collaborative approach by all. This is not a task that one institution can carry out alone. Policy makers, regulators, financial service providers, public and private sector agencies, have a crucial role to play. We hope the training by VISA on day three will help appreciate this aspect better.

We look forward to your active participation and contribution to this training, albeit virtual. Your feedback is invaluable to us, please share your thoughts with our team who will be with you through these two days. Thank you once again for joining us, and I wish you productive training sessions.

Again, thank you to the BCEAO team and my colleagues at AFI for putting this training together.