BoZ to ensure safe product innovation

BUUMBA CHIMBULU writes THE Bank of Zambia (BoZ) is in the process of developing regulations which will facilitate testing of specific innovations in a controlled environment prior to the deployment of such products in the market. BoZ Governor, Denny Kalyalya, said the Central Bank was is in the process of developing Sandbox regulations. A regulatory sandbox is a framework set up by a regulator that allows Financial Technology (FinTech) startups and other innovators to conduct live experiments in a controlled environment under a regulator’s supervision. These regulations, Dr Kalyalya explained, would facilitate testing of specific innovations in a controlled environment prior to the deployment of such products in the market. The Governor was speaking this week in Lusaka during the launch of the Zambia Digital Economy Diagnostic Report developed by the World Bank. “The Bank has recorded an increase in the number of innovative products presented for licensing.  “In accordance with the State of the Digital Financial Services Market in Zambia survey conducted by the United Nations Capital Development Fund, in conjunction with the Bank of Zambia, there were more than 25 FinTechs operating in Zambia as at end-2018,” he said. Dr Kalyalya also said there had been a growth in Quick Reference (QR) code based payments.  He said the deployment of QR codes would help reduce the cost of digital payment acceptance, especially for Small and Medium-Size Enterprises (SMEs) and micro merchants.  This, Dr Kalyalya explained, would further spur the spread of digital financial services to individuals and businesses at various levels and transition them into the formal segment of the financial sector. “To realise the full potential of digital financial services and increased financial inclusion, it is imperative for stakeholders to continue working together to overcome emerging challenges, notably, cybersecurity risk, identity theft, and the financial and technology literacy gap. “We therefore need to institute stringent measures to safeguard the digital space, protect customer identity, and implement fully the National Strategy on Financial Education 2019-2025,” Dr Kalyalya said. Ministry of Commerce, Trade and Industry, Permanent Secretary, Mushuma Mulenga, observed the need to leverage on technology particularly during the Covid-19 period to ensure smooth trade. Mr Mulenga said the effects of not leveraging on technology had been exposed during this period. He said this in a speech read on his behalf by Ministry’s Director-Domestic, Sangwa Ngwira. The Sun