Calls to regulate Ghana’s mobile banking gaining momentum

Mobile banking, an innovative service that allows customers to perform banking transactions via their mobile phones, must be properly regulated in Ghana to ensure the safety of people’s money in the cyberspace.  This is the view of Ghana-based Cal Bank MD Frank Adu Jnr. He made these remarks recently in Kumasi.

Ghana has a plethora of banks, including global giants UK’s Barclays and Standard Chartered, South Africa’s Standard Bank (trading as Stanbic Bank) and Ecobank, and most of them are offering mobile banking services.  But Biztechafrica has established that many customers were reluctant to use this service due to widespread banking fraud currently affecting this West African nation.

Some reports alleged early this year that Ghana’s commercial banks were covering up fraud to avoid bad publicity.  Agnes Amofah stated, “I don’t want to use any one of these, cellphone banking or internet banking, because it’s not safe even tough banks are saying otherwise.”

She went on to add, “Technology is good but it has also brought us a lot of headache. I work hard for my money and I don’t want to take any risks.”  If Ghana’s mobile banking is indeed in a messy and chaotic state, then Adu Jnr, like many other analysts, had all the reason in the world to express concern about it.

He said there was no legislation as to who was responsible for the safety of monies when it went into the cyberspace.  He regretted that mobile banking was not regulated by rules such as the reserve requirement of banks, as in the case of commercial banks guaranteeing the safety of clients’ monies.

Despite the country’s banks’ aggressive marketing on mobile banking, it would appear that the unregulated state of the sector makes it a no-go area for many customers, and banks despite living in denial seem to understand it behind the scenes.  A Pricewaterhousecoopers (PwC) study, 2013 Ghana Banking Survey Harnessing the Potential of SMEs, found that Ghana’s banking industry does not believe that mobile banking is set to generate revenues of a significant scale from the SME market segment to merit sufficient attention and investment.

The report also said that 80 percent of surveyed banks ranked mobile banking as being of the least importance in terms of generation of economic benefits for banks.  Some banks remarked that they were not convinced that the country’s banking population was ready to adopt the alternative channel afforded by mobile banking, the report said.

Source: Biztech Africa