Banks in the country are optimistic that introducting the Bank of Ghana’s (BoG) e-cedi will facilitate low transaction costs, improve security of payments as well as enhance higher monetary transaction limits, the 2021 PwC Ghana Banking Survey Report has revealed.
According to the report, 95% of banking executives in the country agree that the digital currency will impact the banking sector and the wider economy positively; through a deepening of financial inclusion, providing additional thrust for the country’s digitisation agenda, and improving execution of monetary policy via enhanced control over money supply.
It added that 70% of bank executives interviewed are convinced that use of the e-cedi currency will be prominent within three to five years. “The responses that we received to our questions have helped us form an interesting picture of excitement, expectation, apprehension and preparedness,” the report said.
The e-cedi is intended to complement and serve as a digital alternative to physical cash, thus driving the Ghanaian cash-lite agenda through promotion of digital payments while ensuring a secure and robust payment infrastructure in Ghana. It also aims to facilitate payments without a bank account, contract or smartphone – boosting the use of digital services and promoting financial inclusion among all demographic groups.
Expectations of banks
Presenting their expectations, the report said 85% of banks executives emphasised that the BoG must ensure the principles of confidentiality, data privacy and security are incorporated in designing the e-cedi to help build trust. This, they assert, will encourage uptake of the digital currency when it is launched.
It added that 60% of bank executives are of the view that the role played by the central bank in the e-cedi project will determine – in a significant way – the success or otherwise of e-cedi currency. “The industry looks forward to additional consultation and dialogue with BoG, as they believe that such further consultation will enable greater understanding of the e-cedi and assist their preparedness toward its successful implementation.”
Making an appeal to the central bank, the report stated that executives of banks in the country say they expect the BoG to involve the industry in development of legislation and regulations governing the e-cedi; meanwhile, 80% of executives interviewed expect the regulator to consult the industry in determining the pricing structure for e-cedi-based products.
Reservations by executives of banks
The report revealed that even though executives of banks are excited about the project, 85% of them expressed some apprehension – requesting further engagements with the BoG in order to better understand the proposed digital currency and its associated infrastructural requirements.
“They note that there is currently insufficient clarity around legislation/regulations; technical and funding support that will be availed; and the role expected of banks in the currency’s deployment. This makes them uneasy about any potential demands the central bank will place on them when it launches the e-cedi.”
According to the report, the respondents identified insufficient knowledge about the technology and currency for both staff and customers of banks; funding; and regulatory uncertainty as the top-three challenges currently associated with the e-cedi project.
They acknowledged that these challenges could very well be misplaced, and look forward to them being addressed by the central bank through increased engagement and a ramping-up of public awareness-creation and education.
The respondents are of the view that if they are sufficiently informed on what to expect, they can ascertain if their current infrastructure and platforms are fit for purpose and determine what investments are necessary.
“Other operational areas that banks insist must engage the design-attention of the central bank and its solutions partners are the basic requirements of cybersecurity and data protection, which are fundamental to building trust among the users of any financial product.”
According to the respondents, it is important for the BoG to balance, very carefully, the key requirement of security against other objectives – such as higher transaction speeds and lower transaction costs – aiming overall to achieve a balance that keeps security sacrosanct.