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(L-R): Dr Diane Karusisi, CEO, Bank of Kigali and Dr Reda Helal, group managing director – processing, Africa and co-head group processing, Network International. (Image source: Network International)

Dr Diane Karusisi, CEO of Bank of Kigali, and Dr Reda Helal, group managing director – Processing at Network International, highlight the pivotal role of financial inclusion and literacy initiatives in fueling the growth of digital economies 

Rwanda stands out as a prime example, setting ambitious goals to achieve 90% formal financial inclusion by 2024.

A telltale sign of a burgeoning digital economy lies in its robust initiatives aimed at enhancing financial inclusion and literacy. Rwanda, acknowledging the pivotal role of financial inclusion in its development and economic advancement, stands out as a notable exemplar. The nation has embarked on a commendable journey of introducing programs geared towards fostering a vast digital economy, garnering increasing international acclaim along the way. With a determined vision, Rwanda has set an ambitious target of achieving 90% formal financial inclusion by 2024.

Central to this endeavor is the promotion of inclusivity, which entails the active involvement of microfinance institutions, savings and credit cooperatives, and mobile network operators. Additionally, ensuring interoperability in digital payments is deemed crucial, particularly for populations historically excluded from formal banking services and reliant on cash-based transactions. This concerted effort is instrumental in extending accessibility to financial services, thereby empowering marginalised segments of society and propelling Rwanda towards economic prosperity.

Digital transformation

In the evolving landscape of digital payments, financial institutions face increasing pressure to expand their digital reach, particularly with the emergence of Fintechs and wallet operators. Regulatory demands, competition, consumer expectations, and product innovations have reshaped the industry, challenging payment leaders to adapt.

Acknowledging the significance of digital transformation and data access, Rwanda passed legislation in October 2021 to safeguard personal data and privacy. This legal framework facilitates secure domestic and international data flows, unlocking the potential benefits of data-driven technologies like AI for both businesses and individuals in Rwanda.

The Bank of Kigali stands as a notable example of embracing digitalization. Over the past four years, it has transitioned from traditional banking methods to a structured digital platform, introducing internet banking, a mobile app, ISO standardization, and cyber resilience measures to ensure customer data safety and facilitate digital transactions.

Rwanda's internet penetration reached 30.5% of the population by January 2023, with 4.25 million internet users. Smartphone ownership stands at 26.7% among men and 21% among women, while the number of mobile phone users reached 11.7 million by June 2023. With mobile penetration at 87%, there is growing interest in digital payment solutions.

Given the increasing mobile usage and e-commerce activities in Rwanda, banks are compelled to strengthen their digital payment services. For instance, the Bank of Kigali sought guidance from Network International to enhance its offerings. Leveraging advanced technologies, market insights, and data analytics, Network assists the bank in refining its service proposition to align with evolving consumer spending patterns.

Mitigating fraud risks in digital payments

In the dynamic landscape of digital payments, the specter of fraud poses a significant challenge. According to TransUnion Africa, digital transactions in financial services surged by 12.2% in the first half of 2023, with suspected digital fraud attempts for transactions from Rwanda soaring by 252% year-over-year (YoY), marking the highest increase among analyzed industries. The Rwanda Investigation Bureau reported 254 cases of cybercrime amounting to RWF 416 million in losses in 2021.

While fintechs and other emerging players revolutionise banking services, they also prioritise fortifying their systems with strategic analysis and secure data management to thwart increasingly sophisticated fraudulent activities. Network, in this context, provided Bank of Kigali with an authorization strategy backed by detailed analysis, focusing on authorization diagnostics, data integrity, and fraud prevention. Drawing insights from this analysis, Network offered recommendations to enhance operational efficiency, mitigate risks, and spur growth.

In an era marked by a burgeoning reliance on mobile wallets, digital-only banking platforms, and contactless payments, advanced tools and technologies leave little room for error or vulnerabilities. This heightened security environment fosters the adoption of digital payment solutions among merchants and consumers, facilitating convenient access to services such as remittances, timely purchases, e-commerce, small business promotions, insurance payouts, and more.

By fostering innovation and operational excellence within financial institutions, Network International contributes to government-led initiatives for financial inclusion and sustains commerce among diverse segments of the population.

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