Kenya’s Capital Markets Authority, (CMA) and Retirement Benefits Authority (RBA), along with other stakeholders, have called for far-reaching financial sector reforms as they push for the adoption of blockchain technology.
The industry regulators made their remarks at an event known as the Joint Financial Sector Regulators Board Members Retreat in Kenya’s Mombasa County. The affair was attended by representatives from the CMA, the RBA, the Central Bank of Kenya and the Abu Dhabi Global Markets (ADGM) Financial Services Regulatory Authority, among other industry stakeholders
Speaking at the event, famous Technocrat and University of Nairobi Associate Professor, Bitange Ndemo argued that it is undeniable that blockchain and Artificial Intelligence (AI) are two of the major technologies that are catalyzing the pace of innovation and introducing radical shifts in every industry.
“Block-chain is an attempt to automate trust,” Ndemo said, referring to the technology that underpins digital currency such as Bitcoin, Litecoin and Ethereum, among others. The technology allows digital information to be distributed, but not copied.
“Just being digital isn’t the ultimate destination. You have to be willing to be disruptive,” Ndemo added.
“The 1st Industrial Revolution used water and steam power to mechanize production. The 2nd used electric power to create mass production. The 3rd used electronics and information technology to automate production Now a 4th Industrial Revolution is building on the 3rd, the digital revolution that has been occurring since the middle of the last century. It is characterized by a fusion of technologies that is blurring the lines between the physical, digital, and biological spheres,” Ndemo explained.
Others echoed his sentiments, arguing that Kenya could become a self-sufficient economy if the right policies were adopted, freeing the country from an over-dependence on foreign aid.
Mr. Evans Osano, Director of Financial Markets at non-profit organization, Financial Sector Deepening (FSD) Africa, called for regulator support at the Retreat.
Also speaking at the event, RBA Chairman Victor Pratt noted that the shift from ‘Aid to Trade and Investment’ calls for review of how Financial Sector Regulators interact in light of Kenya’s huge fiscal deficit, inflation, the rising costs of everything and higher taxes.
“It’s not a question of how big or small we are. Small and Medium Sized and Micro-enterprises are major custodians of badly needed growth in the informal sector that must be brought into the fold in terms of connections and opportunities,” he said.
“We need to portray and package ourselves as independent but unifying pillars in the eyes of children, the youth, communities as well as women’s groups, the key sources of economic growth and expanded tax base,” Pratt added.
He stated that a classic example of effective development was evident in Canada, whose government recently took a stand against America in its interest. He also cited India as the only country that has a Ministry to handle matters to do with its diaspora.
“I would recommend that we have a joint committee to look into such issues,” said Pratt.
The RBA also mentioned how technology is benefiting Kenya’s retirement industry.
“We are currently at 20% pension coverage up from 13% in 2013,” said RBA Chief Executive, Nzomo Mutuku.
“The high uptake has been partly driven by technology. We need to collaborate more to deepen coverage in the informal sector too,” he added.
“As financial sector regulators we must close the information gap,” commented Central Bank of Kenya Governor, Dr. Patrick Njoroge, who has been a strong advocate of efforts seeking to reach unbanked and uninsured Kenyans.
“Collaboration is key,” concluded Mr. Wai Lum, Capital Market Executive Director at Abu Dhabi Global Markets (ADGM) Financial Services Regulatory Authority, as Nzomo called for financial sector regulators to be more proactive in adopting innovations.