RegTech Africa Conference 2023: James Claude talks about RegTech best practices for compliance and revenue mobilization

The increased digitalization of the African economy is requiring governments and regulators to upgrade their approach to governance. Regulatory technology, or RegTech, helps them keep up with the fast pace of digital transformation by enabling them to meet the new technological requirements that emerged from this evolution. The purpose of RegTech is to improve transparency and compliance in key economic sectors. It gives the authorities the means to leverage the huge volumes of data these sectors yield. In turn, this leads to greater security and revenue assurance, among other benefits. The 2023 edition of the RegTech Africa Conference hosted an exchange on best practices to harness RegTech to promote compliance and revenue mobilization. GVG, as a leading RegTech provider in Africa, shared some of its experience and expertise on the topic.

Harnessing RegTech to promote compliance

In today’s increasingly digitalized economy, Regtech is being hailed as the technological answer to regulatory compliance. RegTech is the name of the RegTech Africa Conference’s game, and this year’s conference took place under the theme “Elevating national policy on financial inclusion, consumer protection, and cybersecurity”. GVG’ CEO, James Claude, participated in the discussion group addressing the topic of Data & Transaction Monitoring. Alongside him were Mrs. Freda Bruce-Bennett, Deputy Director, Digital Economy Department, Nigerian Communications Commission (NCC); and Patrick Boscher, RegTech Pioneer & former Executive Global Head of Compliance Transformation & Innovation for the Allianz Group.

Moderated by Frederick Asumanu, Director (Policy Regulations), Financial Inclusion Forum Africa and Head of the Market Regulation Unit at the National Communications Authority (NCA), Ghana, the exchange between James and his co-panelists revolved around the ways in which governments can harness RegTech to drive domestic revenue mobilization (DRM), minimize revenue leakages and maximize governments’ regulatory capacities.

The discussion started with some considerations on the benefits of RegTech as a compliance tool. Patrick Boscher described RegTech as a unique opportunity for regulators and companies to “shape the future” when it comes to cybercrime and system testing. James Claude then shared his experience, as the CEO of GVG, a leading Regtech provider in Africa, in successfully implementing RegTech solutions for African regulators.

GVG’s solutions give the latter the capacity to ensure compliance in key economic sectors, thus fostering security, effective revenue mobilization and financial inclusion. Bringing in a regulator’s perspective, Freda Bruce-Bennett added that RegTech’s potential to ensure compliance needed to be nurtured through a deepening of the collaboration between the entities concerned.

Overall, the exchange highlighted that reinforcing governments’ regulatory capacities and ensuring data integrity were also key requirements to optimize RegTech’s potential.

Here you can watch the video of the full session!

Maximizing governments’ regulatory capacities

One of the challenges that widespread RegTech implementation is currently facing in Africa is the absence of a relevant regulatory framework. According to Patrick Boscher, there is therefore a need to create the necessary policies and regulations. Patrick deplored the fact that “everything is regulated except RegTech” and argued that Regtech needed a lobby to have a voice in the market.

Another important consideration when engaging in regulatory exploration is the need for RegTech-specific regulation to be harmonized across the African continent. On that topic, James said that the time for regulatory harmonization had come, to allow Africa to position itself and to move towards a single digital market.

To promote the creation of appropriate regulation and its subsequent harmonization, it is essential that all stakeholders, meaning African RegTech companies and government agencies, work together. This would allow the RegTech providers to find out what the regulators’ objectives are, and to bring their products to market.

At this stage, instances of collaboration between the private and public sectors are still limited in Africa when it comes to the implementation of RegTech solutions.

Enhancing data integrity and standardization

Interestingly, the discussion showed that the need for harmonization is not only relevant to regulation but also to data. James highlighted the fact that in Africa, regulatory agencies have the tendency to operate in silos and that the stored data was sometimes not consolidated. The answer to this problem is harmonization. Ghana, for example, is currently making use of a “Common Platform” developed and provided by GVG. This platform allows different government agencies to leverage the data it collects about the country’s key economic sectors.

However, before the data can be harmonized, it is crucial to verify its integrity and reliability. Talking about best RegTech practices from a DRM point of view, Freda Bruce-Bennett stressed the need to ensure that the data is both trustworthy and actionable. Indeed, she argued, it is “not possible to reduce revenue leakages without clean data”. Freda explained that Nigeria still had a long way to go in relation to its national ID number, as the data provided by individuals requiring a birth certificate, for instance, could not be verified. Enabling data sharing between institutions would help resolve this problem, James said. He cited Estonia as a model of data sharing, before pointing out that a similar initiative was being implemented in Togo.

Still from a DRM perspective, Patrick called for the implementation of data-specific regulatory sandboxes to explore what to do with the relevant data, giving Singapore and Hong Kong as examples of countries having launched such initiatives. African governments are no strangers to regulatory sandboxes. Indeed, several of them have already gone that route in relation to fintech, for example.

However, beyond data integrity and regulatory harmonization, what RegTech needs to further consolidate its position as a game changer when it comes to compliance is a clear vision on the part of governments, according to James. RegTech companies in Africa have the technology, governments need to provide the framework for the technology’s implementation. Such a vision would help foster collaboration between the stakeholders and define best practices. Some African countries, like Rwanda, Congo, and Ghana, have such a vision, and GVG is proud to be their RegTech partner in compliance.

Want to read about the role of RegTech in enforcing compliance in the telecom sector? Click here.