The Bank of Namibia (BoN) has implored NamClear to be proactive to ensure that clearing infrastructure and ecosystem is well and timeously modernised.
BoN Deputy Governor Leonnie Dunn said it was crucial for NamClear to avoid complacency, thus it should continuously challenge the current operational model of global sameness and remain unique and relevant in delivering much-needed services.
“In a world of explosive fast-paced technological disruption and development, constantly reflect on how you as NamClear can reinvent yourself. Understand that your purpose is compelling, and your service provides added value; then your customers will always need you and will have no alternative even when you are not there,” said Dunn.
“Today’s reality is that if we are not prepared to plant the stakes exponentially high and elevate our business to have a compelling purpose and be an added value creator, one runs the risk of being disrupted in real-time by technology and other unforeseen developments. As a Central Bank, we encourage you to continually embrace innovation in order to thrive in the digital economy that is unfolding right before our eyes.”
Dunn made these remarks at the 20th anniversary of NamClear, where she further elucidated that the benefits of the digital economy cut across by continuously offering a safer, fast and cost-effective pathway for individuals and businesses to flourish in the marketplace.
“It is opening new opportunities for small and medium-sized enterprises (SMEs) to access competitive, platform-based finance.
“The rise of artificial intelligence (AI) and machine learning (ML), via Large Learning Modules applying continuous unstructured learning, is already having a profound impact on our financial system. More importantly, these and other innovations can potentially assist in democratising financial services in Namibia,” she said.
The former Chief of the Financial Intelligence Centre added that by implementing branchless banking and other digital services, the country can leapfrog in terms of technological advancement.
She, however, noted that it is important to ensure that the benefits of technology and innovation are not limited to urban and affluent areas but are also accessible in all regions including rural and informal areas.
“Addressing this challenge of financial inclusion in particular, and especially with focus on the informal economy and rural areas, can only be achieved through enhanced collaboration within the financial sector. By working together, we can access a wide range of knowledge, resources, and technical know-how, ultimately leading us to become more sustainable and globally competitive,” she reiterated.
Prior to independence, Namibia relied heavily on South Africa’s payment infrastructure for clearing and settlement of most payment instruments, which comprised the time of card and cheque transactions.
As such, it was of paramount importance for Namibia to take ownership and control of our clearing and payment systems, and reduce dependencies on South Africa, thus ensuring the efficiency and security of the payments ecosystem.
In 2001, BoN as a representative of all domestic commercial banks in the country initiated the National Payment Reform Project, ultimately leading to the establishment of NamClear in 2003.
Since its inception, the clearing company has introduced various clearing services, including the Electronic Fund Transfer System (EFT) in 2004, the Cheque Processing System (CPS) in 2005, and the domestic card switch, Namswitch, in 2008.
Namswitch became the cornerstone for card interbank transactions, offering interchange fees among its participants and replacing the previous reliance on Saswitch, the South African card switch.
“The two decades of NamClear’s existence serve as proof of the strength of collaboration and shared vision. Through proactive collaboration and alliance-building with diverse stakeholders, including financial institutions, regulatory authorities, and technology providers, we can future proof our financial system.”
“Thus, adopting a win-win collaborative mindset not only increases our potential but also cultivates a culture of ongoing development, pushing us to provide innovative solutions that meet the changing needs of the Namibian payment ecosystem, the Namibian consumer as well as the broader Namibian financial sector and the changing economic infrastructure,” said Dunn.
