BoG urges rural banks to leverage digital technology to stay relevant

Ms. Elsie Addo Awadzi, Second Deputy Governor of the Bank of Ghana (BoG), called on rural and community banks (RCBs) to take advantage of growing digital technology to maintain their relevance in the financial services sector.

She said commercial banks are banking on digital technology and the government’s digitization campaign to increase the attractiveness of rural and local communities.

The Deputy Governor, who was addressing the ARB Apex Bank’s 21st Annual CEO Conference in Ho on Friday, said the reach and acceptance of digital technology should encourage the RCB sector to rethink its strategy.

“Digital technology is redefining the financial landscape. Commercial banks can now reach communities cost-effectively using technology.

“This gap between what belongs to the RCB sector and the commercial banks has disappeared. There is no border in the financial market, and this is a red flag for the RCB sector,” she said.

Ms. Awadzi said customers would be forced to rethink the use of rural banks as commercial banks continued to innovate in a space considered exclusively for BCRs.

She said RCBs must consider digital technology – a “huge area of ​​growth” and leverage their strengths to penetrate local communities, seeking to revise strategies to add value to products and services based on customers. .

“The repositioning of RCB means that it is essential to take stock of the strengths and weaknesses of the industry. Customers drive innovation. They are asking for banking means that are more suitable and deliverable to their liking.

Any financial institution that has not embraced digital transformation technology is clearly behind the times. RCBs should strive to revamp their business terms to remain relevant,” the Deputy Governor added.

She said that the government and its stakeholders recognize the place of BCRs within the country’s financial security structure, and that the Ministry of Finance and the BoG will continue to support the sector to develop on its way to digital transformation.

Ms. Awadzi said the government and the World Bank would work together to strengthen Apex Bank to develop and revive RCBs and help improve the technology exposure of the sector.

She urged industry leadership to “keep in mind the compliments and the risks”, and said that with “strong governance and robust risk management systems”, the risks should be mitigated.

Ms. Awadzi said the RCBs should increase their capital base to be able to implement the appropriate systems and strategies.

She noted that several RCBs had yet to implement the BOGs 2018 cybersecurity strategy and CEOs needed to ensure their institutions toed the line.

She further said that the BoG Sustainable Banking Principles launched in 2019 should be adopted by the BRCs, which should use their lending power to promote clean and more environmentally sustainable ways of doing business.

The three-day conference was themed: “Positioning rural banking at the center of financial service delivery in Ghana – the role of stakeholders”, and brought together the management of Apex Bank, Bank of Ghana and other related financial institutions.