CB to play proactive role in letting economy harness technology to boost growth, efficiency

By Charumini de Silva

The Central Bank yesterday assured it would play a proactive role in promoting the adoption of new technology and innovation in the economy, especially the financial services industry whilst being a r egulator. 

In a globalised world with its continuous race to compete, Sri Lanka should stay focused and keep abreast of the latest technologies the world has to offer, Central Bank Governor Dr. Indrajit Coomaraswamy said while insisting that innovation and localisation in applying new technologies was the key to success.  

During his address at the opening of CIO Confluence 2017, titled ‘Thriving for Digital Value’, the Governor said that despite the Central Bank being the regulator it was also required to play a forward-looking role in aiding the adoption of technology, 

He said the Central Bank had to take regulatory measures to minimise technology risks as well as to ensure economic and price stability as well as financial system stability, while facilitating innovation and the introduction of new technologies.  

“This is a challenging balance to strike. To play this role effectively, we are acutely aware that the Central Bank, as the regulator, needs to be proactive. We have to be agile and forward-looking. We are aware that the regulator needs to be in a position to lead rather than follow; we look forward to working closely with you to achieve the right combination of technological advancement and stability,” he added.

In addition, he noted that governance standards, internal controls, risk management and compliance including AML/CFT must also evolve to keep pace with rapid change. 

“None of us can afford to remain in our comfort zones, merely indulging ourselves in mechanical box-ticking exercises,” he stressed.

Dr. Coomaraswamy assured that the Central Bank was fully supportive of digitalisation and the use of new technologies.  “It in fact promotes a less-cash society through the use of new payment mechanisms such as mobile apps, QR code payments and the internet. However, all these are required to be compliant with the prevailing acts and regulations of the Central Bank and the country.”

It was pointed out that in order to support this initiative, the Central Bank, together with LankaClear, has established the payments and settlements infrastructure in the country, positioning Sri Lanka as one of the leading countries in South Asia in the payments and settlements landscape by rolling out real-time 24x7 electronic fund transfer systems, efficient customs payment systems, mobile payment wallets and so forth.

“We are proud to say that efficiencies of some of our retail payment products exceed the efficiencies of similar products prevalent even in countries like Singapore. This minimises the economic costs arising from the payments clearing lag,” he said.

Dr. Coomaraswamy also acknowledged the Central Bank seeks to achieve a less cash society by here again creating a balance between regulation and innovation.  

“It is the institution that is ultimately responsible to the people and the Government for the safety and security of the currency as well as the monetary management of the economy. But this vision can be achieved only through the cooperation of all players in the finance and banking ecosystem,” he expressed.