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The Bank of Zambia (BoZ) has urged financial service providers to understand the risks associated with their innovations so as not to compromise the stability of their institutions and of the financial systems as a whole.
Denny Kalyalya, BoZ Governor said while the Central bank acknowledged innovation by financial service providers to increase access to formal financial services, it was important for them to be conscious.
He said this at the launch of the First National Bank (FNB) Zambia Bank on Wheels initiative in Lusaka on Tuesday.
“It is increasingly evident that financial service providers will have to move out of their comfort zone to foster financial inclusion.
“However, it is also important that financial service providers should understand the risks associated with their innovations so as not to compromise the stability of their institutions,” Kalyalya said.
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He indicated that financial inclusion remained a key priority as it improved the intermediation function of financial service providers, in addition to expanding the economic opportunities of those who became financially included.
The Central Bank, he said, would continue to support innovations aimed at reducing the proportion of the financially excluded through the promotion of formal financial inclusion leveraging on Digital Financial Services (DFS) and partnerships with key stakeholder institutions.
“In this regard, the Bank of Zambia remains resolved to continue addressing financial exclusion in conjunction with other financial sector players who play a critical role in spearheading innovative financial solutions,” Kalyalya said.
At the same function, Finance and National Planning Minister, Situmbeko Musokotwane, said Zambia’s banking sector had registered tremendous transformation over the years with the support of innovation and digitalisation.
Musokotwane pointed out how the banking sector had evolved over the years.
He recalled how difficult it was for customers to access financial services on days they did not have cash.
“We have seen the transformation of the sector to where it is today. When we were just starting our careers, if you had not gone to a bank by Friday or Saturday morning, if you did not draw some cash, then you had a miserable weekend because there was no other way of collecting money and of paying.
“But today we can pay using mobile money and do all sorts of things. We have gone a long way from where some of us have come from,” he said.
Meanwhile, FNB Zambia Chief Executive Officer, Bydon Longwe, said the Bank on Wheel would not be moving with cash when in transit to protect both customers and members of staff.
“It is important that we talk about security of bank of wheels. It is fully equipped with banking facilities and integrated with a core banking system to provide customers with daily banking requirements.
“It will not be moving with cash when in transit. It is also equipped with CCTV and other security features,” Longwe said.
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