BoG urges Rural Community Banks to leverage digital technology to remain relevant

Elsie Addo Awadzi, Second Deputy Governor of the Bank of Ghana (BoG), has called on Rural and Community Banks (RCBs) to leverage growing digital technology to maintain relevance within the financial services sector. She said commercial banks were riding on digital technology and the government’s digitisation drive to increase appeal among rural and local communities. The Deputy Governor, who was addressing the 21st Annual CEOs Conference of the ARB Apex Bank in Ho on Friday, said the reach and acceptance of digital technology should encourage the RCB sector to re-strategise. “Digital technology is redefining the financial landscape. Commercial banks now can reach communities cost-effectively using technology. “That divide between what belongs to the RCB sector and the commercial banks are gone. There is no boundary in the financial market, and it’s a wake-up call for the RCB sector,” she stated. Mrs Awadzi said customers would be forced to rethink the use of rural banks as commercial banks continued to break ground in a space that was considered exclusively for RCBs. She said RCBs must consider digital technology an “enormous growth area,” and leverage their strengths in penetrating local communities, in seeking to revise strategies to add value to the products and services to suit customers. “Repositioning RCBs means it’s essential to take stock of the strengths and weaknesses of the industry. Customers are driving innovation. They are asking for ways of banking that are more suitable and deliverable to their taste.  Any financial institution that has not adopted digital transformation technology is clearly behind the curve. RCBs should endear to reorganize their business modalities to remain relevant,” the Deputy Governor added. She said the Government and its stakeholders recognised the place of RCBs within the nation’s financial security structure, and that the Ministry of Finance and the BoG would continue to support the sector to grow along the digital transformation path. Mrs Awadzi said the Government and the World Bank would work together to strengthen the Apex Bank to scale up and revive RCBs and help enhance technology exposure for the sector. She urged the management of the sector to “keep in mind the compliments and the risks,” and said with “strong governance, and strong risk management systems,” the risks should be mitigated. Mrs Awadzi said RCBs would have to augment their capital base to be able to implement the appropriate systems and strategies. She noted that several RCBs were yet to implement the BOGs 2018 cyber security strategy and that CEOs must ensure their institutions took the line. She further said the BoG’s sustainable banking principles launched in 2019 should be embraced by RCBs, which are expected to use their lending power to promote clean and more environmentally sustainable ways of doing business. The three-day conference was on the theme: “Positioning Rural Banking at the Center of Financial Services Delivery in Ghana- the Role of Stakeholders”, and brought together top management of the Apex Bank, the Bank of Ghana and other related financial institutions. Alex Kwasi Awuah, Managing Director of the ARB Apex Bank, said the rural financing gap, which formed the rationale behind the establishment of the rural banking system in Ghana by the BoG, had not been addressed 50 years on. He said it was because the sector had not embraced the tools available. “Digitisation and growth in financial technology solutions would help fully embrace the digital revolution by delivering the right products and services to bridge this yawning gap in the rural and community banking sub-sector,” Mr Awuah said. The Managing Director said the ARB remained confident that with its agency and digital banking systems, the sector’s needs would be met. He said CEOs remained the guarantors of the successes of the banks and should focus on saving banks from deterioration. He called to price products and services to help draw customers closer and to tighten controls to prevent fraudulent practices that had been rampant in the sector. Dr Toni Aubynn, Board Chairman of the Apex Bank, challenged RCBs to “use turbulent times to seek innovative thoughts and skills to bear in withstanding global whirlwinds and be able to emerge stronger.” Watch the latest episode of BizTech below:

Elsie Addo Awadzi, Second Deputy Governor of the Bank of Ghana (BoG), has called on Rural and Community Banks (RCBs) to leverage growing digital technology to maintain relevance within the financial services sector. She said commercial banks were riding on digital technology and the government’s digitisation drive to increase appeal among rural and local communities. The Deputy Governor, who was addressing the 21st Annual CEOs Conference of the ARB Apex Bank in Ho on Friday, said the reach and acceptance of digital technology should encourage the RCB sector to re-strategise. “Digital technology is redefining the financial landscape. Commercial banks now can reach communities cost-effectively using technology. “That divide between what belongs to the RCB sector and the commercial banks are gone. There is no boundary in the financial market, and it’s a wake-up call for the RCB sector,” she stated. Mrs Awadzi said customers would be forced to rethink the use of rural banks as commercial banks continued to break ground in a space that was considered exclusively for RCBs. She said RCBs must consider digital technology an “enormous growth area,” and leverage their strengths in penetrating local communities, in seeking to revise strategies to add value to the products and services to suit customers. “Repositioning RCBs means it’s essential to take stock of the strengths and weaknesses of the industry. Customers are driving innovation. They are asking for ways of banking that are more suitable and deliverable to their taste.  Any financial institution that has not adopted digital transformation technology is clearly behind the curve. RCBs should endear to reorganize their business modalities to remain relevant,” the Deputy Governor added. She said the Government and its stakeholders recognised the place of RCBs within the nation’s financial security structure, and that the Ministry of Finance and the BoG would continue to support the sector to grow along the digital transformation path. Mrs Awadzi said the Government and the World Bank would work together to strengthen the Apex Bank to scale up and revive RCBs and help enhance technology exposure for the sector. She urged the management of the sector to “keep in mind the compliments and the risks,” and said with “strong governance, and strong risk management systems,” the risks should be mitigated. Mrs Awadzi said RCBs would have to augment their capital base to be able to implement the appropriate systems and strategies. She noted that several RCBs were yet to implement the BOGs 2018 cyber security strategy and that CEOs must ensure their institutions took the line. She further said the BoG’s sustainable banking principles launched in 2019 should be embraced by RCBs, which are expected to use their lending power to promote clean and more environmentally sustainable ways of doing business. The three-day conference was on the theme: “Positioning Rural Banking at the Center of Financial Services Delivery in Ghana- the Role of Stakeholders”, and brought together top management of the Apex Bank, the Bank of Ghana and other related financial institutions. Alex Kwasi Awuah, Managing Director of the ARB Apex Bank, said the rural financing gap, which formed the rationale behind the establishment of the rural banking system in Ghana by the BoG, had not been addressed 50 years on. He said it was because the sector had not embraced the tools available. “Digitisation and growth in financial technology solutions would help fully embrace the digital revolution by delivering the right products and services to bridge this yawning gap in the rural and community banking sub-sector,” Mr Awuah said. The Managing Director said the ARB remained confident that with its agency and digital banking systems, the sector’s needs would be met. He said CEOs remained the guarantors of the successes of the banks and should focus on saving banks from deterioration. He called to price products and services to help draw customers closer and to tighten controls to prevent fraudulent practices that had been rampant in the sector. Dr Toni Aubynn, Board Chairman of the Apex Bank, challenged RCBs to “use turbulent times to seek innovative thoughts and skills to bear in withstanding global whirlwinds and be able to emerge stronger.” Watch the latest episode of BizTech below: