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Africa’s Digital Economy poised to explode as regional integration opens new markets

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With Africa’s digital economy taking off exponentially, the continent must ready itself to maximize the potential dividends of the Continental Free Trade Area agreement, panel members told a packed auditorium in Kigali at the opening of Transform Africa Summit 2019 on Tuesday.

Key to this effort will be connectivity, data and digitization and innovation among others, conference attendees heard.

“Africa can achieve a digital single market…It is a journey and we need to break it up into doable bits, “African Development Bank Vice-president, Private Sector, Infrastructure and Industrialization Pierre Guislain, said, adding that the European Union had demonstrated that it could be achieved.

Other members of the panel Lacina Kone, Director General / CEO of Smart Africa, the conference organizers, Fatoumata Ba, CEO Janngo, Nic Rudnick, CEO Liquid Telecom Group and Elsie Kanza, Head of Africa, World Economic Forum, shared similar sentiments.

This year’s summit which is themed Boosting Africa’s Digital Economy, aims to showcase success stories in the African digital economy and promote homegrown businesses, innovations, solutions and partnerships.

In a special intervention from the audience, World Bank Digital Director Dr. Boutheina Guermazi said:

“ICT and digital literacy is not a luxury. It is an integral part of how we view development,” adding that the foundations of the digital economy – connectivity, data and voice, would depend on a fully integrated digital infrastructure.

With the ratification of the Africa Continental Free Trade Area, the possibility of new markets offer tantalizing new avenues for tech start-ups and e-businesses and a combined GDP of over $600 billion.

The internet has opened doors to access information and technology, a key component of accelerating the pace of the digital economy and connecting markets. Interconnection and interoperability create bigger markets which in turn attract investors.

The mobile phone industry is an example of the dynamism of the sector in Africa. Mobile phone subscriptions have grown in Africa from 87 million in 2005 to 760 million in 2017, growing 20% per annum. This is the fastest growing market in the world as well as the one with the most potential. Mobile network coverage ranges from 10 to 99% in Africa– an average of 70%.

Africa’s pioneering efforts in the FInTech space are illustrated by the fact that around half the world’s mobile money providers operate in sub-Saharan Africa, where as many as 80% of adults have a mobile phone. By 2020, the value of Africa’s mobile money industry is projected to top $14bn.

Single window schemes and One Stop Border Posts will accelerate intra-African trade, Guislain said, but openness and competition need to be promoted and defended. Indeed, some vested interests may fear this openness and do whatever they can to keep it from happening. We need to measure the speed of movement along Africa’s major trade corridors and ensure any remaining bottleneck gets removed, he added.

Africa also needs more private sector African champions – companies that have done well nationally and are ready to expand regionally and beyond.

“Business needs to be more of a driver. Domestic African private sector needs to go outside its borders to develop value chains…Africa has shown it can deliver,” Guislain said.

The 2019 Summit aims to provide practical ways to advance the commitments of African governments and partners to transform Africa into a fully digitized economy where technology is harnessed to fully reap the benefits of Pan-African integration efforts.

The Summit was formally opened by Rwandan Prime minister Dr. Ngirente Edouard, who talked about Rwanda’sambitious plan to prioritize digital literacy for all youth by 2024. “We expect to achieve at least 60% by 2024,” he said.

Bank President Akinwumi Adesina will attend the official opening of the summit on Wednesday by Rwandan President Paul Kagame.

An estimated 4,000 visitors from over 90 countries are expected for the three-day meeting which has become the continent’s premier digital technology summit. The next two days will see the launch of a Smart Africa Digital Economy Mapping Report, and a Smart Africa Women’s summit as well as several interactive plenaries.

SOURCE African Development Bank (AfDB)

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Central banks and the FinTech sector unite to change global payments space

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The BIS, along with seven leading central banks and a cohort of private financial firms, has embarked on an ambitious venture known as Project Agorá.

Named after the Greek word for “marketplace,” this initiative stands at the forefront of exploring the potential of tokenisation to significantly enhance the operational efficiency of the monetary system worldwide.

Central to this pioneering project are the Bank of France (on behalf of the Eurosystem), the Bank of Japan, the Bank of Korea, the Bank of Mexico, the Swiss National Bank, the Bank of England, and the Federal Reserve Bank of New York. These institutions have joined forces under the banner of Project Agorá, in partnership with an extensive assembly of private financial entities convened by the Institute of International Finance (IIF).

At the heart of Project Agorá is the pursuit of integrating tokenised commercial bank deposits with tokenised wholesale central bank money within a unified, public-private programmable financial platform. By harnessing the advanced capabilities of smart contracts and programmability, the project aspires to unlock new transactional possibilities that were previously infeasible or impractical, thereby fostering novel opportunities that could benefit businesses and consumers alike.

The collaborative effort seeks to address and surmount a variety of structural inefficiencies that currently plague cross-border payments. These challenges include disparate legal, regulatory, and technical standards; varying operating hours and time zones; and the heightened complexity associated with conducting financial integrity checks (such as anti-money laundering and customer verification procedures), which are often redundantly executed across multiple stages of a single transaction due to the involvement of several intermediaries.

As a beacon of experimental and exploratory projects, the BIS Innovation Hub is committed to delivering public goods to the global central banking community through initiatives like Project Agorá. In line with this mission, the BIS will soon issue a call for expressions of interest from private financial institutions eager to contribute to this ground-breaking project. The IIF will facilitate the involvement of private sector participants, extending an invitation to regulated financial institutions representing each of the seven aforementioned currencies to partake in this transformative endeavour.

Source: fintech.globa

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TD Bank inks multi-year strategic partnership with Google Cloud

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TD Bank has inked a multi-year deal with Google Cloud as it looks to streamline the development and deployment of new products and services.

The deal will see the Canadian banking group integrate the vendor’s cloud services into a wider portion of its technology solutions portfolio, a move which TD expects will enable it “to respond quickly to changing customer expectations by rolling out new features, updates, or entirely new financial products at an accelerated pace”.

This marks an expansion of the already established relationship between TD Bank and Google Cloud after the group previously adopted the vendor’s Google Kubernetes Engine (GKE) for TD Securities Automated Trading (TDSAT), the Chicago-based subsidiary of its investment banking unit, TD Securities.

TDSAT uses GKE for process automation and quantitative modelling across fixed income markets, resulting in the development of a “data-driven research platform” capable of processing large research workloads in trading.

Dan Bosman, SVP and CIO of TD Securities, claims the infrastructure has so far supported TDSAT with “compute-intensive quantitative analysis” while expanding the subsidiary’s “trading volumes and portfolio size”.

TD’s new partnership with Google Cloud will see the group attempt to replicate the same level of success across its entire portfolio.

Source: fintechfutures.com

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MAS launches transformative platform to combat money laundering

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The MAS has unveiled Cosmic, an acronym for Collaborative Sharing of Money Laundering/Terrorism Financing Information and Cases, a new money laundering platform.

According to Business Times, launched on April 1, Cosmic stands out as the first centralised digital platform dedicated to combating money laundering, terrorism financing, and proliferation financing on a worldwide scale. This move follows the enactment of the Financial Services and Markets (Amendment) Act 2023, which, along with its subsidiary legislation, commenced on the same day to provide a solid legal foundation and safeguards for information sharing among financial institutions (FIs).

Cosmic enables participating FIs to exchange customer information when certain “red flags” indicate potential suspicious activities. The platform’s introduction is a testament to MAS’s commitment to ensuring the integrity of the financial sector, mandating participants to establish stringent policies and operational safeguards to maintain the confidentiality of the shared information. This strategic approach allows for the efficient exchange of intelligence on potential criminal activities while protecting legitimate customers.

Significantly, Cosmic was co-developed by MAS and six leading commercial banks in Singapore—OCBC, UOB, DBS, Citibank, HSBC, and Standard Chartered—which will serve as participant FIs during its initial phase. The initiative emphasizes voluntary information sharing focused on addressing key financial crime risks within the commercial banking sector, such as the misuse of legal persons, trade finance, and proliferation financing.

Loo Siew Yee, assistant managing director for policy, payments, and financial crime at MAS, highlighted that Cosmic enhances the existing collaboration between the industry and law enforcement authorities, fortifying Singapore’s reputation as a well-regulated and trusted financial hub. Similarly, Pua Xiao Wei of Citi Singapore and Loretta Yuen of OCBC have expressed their institutions’ support for Cosmic, noting its potential to ramp up anti-money laundering efforts and its significance as a development in the banking sector’s ability to combat financial crimes efficiently. DBS’ Lam Chee Kin also praised Cosmic as a “game changer,” emphasizing the careful balance between combating financial crime and ensuring legitimate customers’ access to financial services.

Source: fintech.global

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