South African central bank sets up full-time fintech unit

South Africa's Reserve Bank has established a three-man fintech unit to monitor the impact of new technology developments on deposit taking, payments, lending, insurance, and investments.

The dedicated, full-time team will report directly to deputy governor Francoise Groepe.

Addressing the initiative in a speech in Cape Town, Groepe says: Given the rapid developments in financial technology it is evident that we are potentially facing one of the most severe innovation and technology-driven disruptioons to products and services, particularly in tthe financial sector space."

South Africa has a relatively small, but growing fintech industry, exemplified by the recent emergence of a new breed of digital-first challengers such as Discovery Bank, Bank Zero and Tyme.

Addressing the regulatory implications, Groepe says a key task of the new unit will be to address the policy implications that arise from fintech developments.

"We as the Sarb favour a 'back to basics' approach," he adds. "Regulators should focus on regulatory principles that are risk-based, rather than creating excessive rules-based regulations aimed at these technologies or products."