Financial institutions to widen reach to meet consumer needs
The government will ease restrictions for financial institutions to widen the reach of their services by directing the Central Bank to issue guidelines to these institutions including banks to introduce new products, Finance Ministry sources said.
Immediate attention has been focused on guidelines for institutions providing services for payment related mobile applications and revision of the Credit Card Operational Guidelines, in line with the new developments in the credit card industry.
Online financial services will be encouraged by easing restricting and creating awareness as the number of people resorting to e-commerce has been increased.
But the Central Bank will be strictly monitoring the improvement of such systems to prevent malpractices and irregularities, a senior Treasury official told the Business Times.
It will have to reinvent supervisory models to take account of the spread of fintech, blockchain and artificial intelligence.
Having no choice than go for online shopping during the mobility restrictions period the urban and semi-urban public began to shift to the digital platform more than ever before.
Purchases in the fast moving consumer good (FMCG ) category has doubled in March 2020 and is expected to grow from 20 percent to 70 percent, an official survey revealed.
Many merchants who relied on conventional sales through physical outlets rapidly adopted online sales platforms.
However, such a swift and widespread transition of sellers and customers to online platforms could not be handled by existing systems leading to system downtimes and interruptions.
There was also a reduction in the usage of physical money, in light of the pandemic, thereby leading to a surge in online transactions.
Two committees appointed by the National Payment Council have already completed the study on the potential impact of fintech and blockchain and to make recommendations for implementation of regulations covering application of new technology, new payment products, consumer protection and system stability.
Apart from these, there are two other initiatives that are currently in the pipeline, to be implemented in the forthcoming year. These are the guidelines for institutions providing services for payment related mobile applications and revision of the Credit Card Operational Guidelines, in line with the new developments in the credit card industry
Financial institutions have been directed to conduct sufficient awareness programmes on new products and emphasis should be placed on security features as well as customer protection for staff as well as for customers.
As several sectors are badly affected due to the pandemic crisis, it is expected that the procurement of ICT products and services in these sectors will be reduced at least by 50 percent, Executive Chairman of Epic Technology Group Dr. Nayana Dehigama told the Business Times.
He noted that this will result in most of the local ICT companies losing usual revenues by a significant portion in the coming months, making it difficult for them maintaining their regular revenue channels for survival.
Financial institutions also need to better adopt or partner with fintech businesses offering digital interactions and to accept that there are alternatives to core legacy IT systems which provide greater speed for revenue generation, effective operations and better customer experience, he said.