The Bank of Namibia has announced the launch of an automated system that will help the bank to maintain financial stability and identify and mitigate risks proactively.
The new system, known as the Automated Regulatory Reporting System, is expected to enhance data collection and analytics capabilities, providing efficient, transparent regulatory processes. According to the apex bank, the system offers an effective, reliable, and scalable way to detect and address any irregularities or issues in near real-time.
The system is set to assist regulated and supervised entities licensed by the bank to conduct banking, currency exchange, and payment service provision activities.
Governor of the Bank of Namibia, Johannes !Gawaxab, believes that the system will lower compliance costs, and ultimately lead to a more agile and collaborative financial sector that provides quality, affordable, and inclusive financial services.
“We take our role as overseer of the financial system very seriously. This system engenders confidence and contributes significantly to the stability and soundness of the domestic financial system. As we have seen globally and locally, banks can fail as businesses,” said !Gawaxab.
He added that a strong and robust supervision system, supported by adequate regulatory technology, is critical to the survival of banks.
“Although not all banks can be saved from failure, with this new system in place, they can be better recovered through early interventions to prevent the contagion effect, thereby protecting the stability of our financial system.The acquisition of the new system comes at a time when regulators and supervisory authorities need to sharpen their oversight over all institutions that are charged with the safekeeping of public deposits and lending activities. The bank notes that recent events in some parts of the globe have shown how excessive risk-taking, poor governance, inadequate capitalisation, mismanagement, fraud, and other practices can bring down these institutions, leading to systemic failures and disruptions to financial stability and economic activities.”
The new system aims to reduce human error and time consumption significantly.
The automated compliance monitoring and supervision allow continuous monitoring, identification, and reporting of issues, keeping the regulated institutions fully compliant according to regulatory expectations.
“Amongst other top-notch capabilities, the Bank has automated the early warning indicators of potential distress in a supervised banking institution. The capability is thus instrumental in the effective supervision and safeguarding of any banking institution’s stability in order to mitigate risks to the soundness and stability of both the institution and the financial system,” said the bank.
Regulated institutions are now able to submit applications on the system with enhanced speed and accuracy, while the Bank can simultaneously track and monitor compliance with supervisory requirements and outstanding compliance obligations.
The launch of the system marks the completion of an intensive and complex regulatory technology project undertaken by the Bank’s three supervisory departments: Banking Supervision, National Payment System, and Exchange Control.
In addition, the Bank of Namibia has announced plans to implement a web-based regulatory system known as the Trade Verification System, in collaboration with the Namibia Revenue Authority.
The new system is expected to reduce illegal outflows of funds from the country by reconciling cross-border money transfers to the movement of goods into the country.
Namibia is currently making frantic efforts to fully comply with anti-money laundering (AML) and countering the financing of terrorism (CFT) regulations to avoid being grey-listed by the Financial Intelligence Centre (FIC).
