- BoG Backs Innovation-Led Regulation as Ghana Shifts from Financial Access to Usage
The Bank of Ghana is adopting a more innovation-led regulatory approach to support the next phase of the country’s digital finance expansion, arguing that regulation should enable new technologies while protecting consumers and preserving financial stability.
Hayford Kumah, head of the DEMI and PSP Office at the central bank’s FinTech and Innovation Department, said the Bank was applying a balanced and proportionate risk framework designed to accommodate new products and business models without weakening confidence in the financial system.
“Our regulatory framework is based on what we call a balanced and proportionate risk framework,” Mr Kumah said at the Ecobank–JoyNews Business Financial Dialogue in Accra.
“We are trying to bring on board as much innovation as possible while also ensuring that this is safe and sound.”
His comments point to a shift in regulatory thinking as digital payments, mobile money and fintech platforms become increasingly important to Ghana’s financial architecture.
Rather than treating innovation primarily as a source of risk, the central bank is seeking to build rules that allow new services to develop within clear safeguards covering consumer protection, operational resilience and systemic stability.
“Innovation and regulation should not be in tension,” Mr Kumah said.
“Rather, regulation should help safeguard innovation in a manner that protects the informal sector worker, the less educated person, and everyone using digital financial services.”
The approach reflects the expanding role of digital finance in a country where mobile money and electronic payments have widened access to formal financial services far beyond the reach of conventional bank branches.
But the Bank of Ghana believes the next policy challenge is no longer simply bringing more people into the financial system. It is encouraging them to use a broader range of services in ways that improve household resilience, savings and long-term economic security.
Mr Kumah cited the Ministry of Finance’s National Financial Inclusion Development Strategy, which places Ghana’s financial inclusion rate at about 96.00%.
He also referred to a lower World Bank estimate of 81.40%, noting that the difference reflected the methodologies used by the two institutions.
“By and large, in terms of access, we have done well. The challenge now is usage,” he said.
That distinction is important because owning a mobile wallet or bank account does not necessarily mean a customer is benefiting fully from the financial system.
Many users continue to treat mobile money accounts primarily as channels for receiving cash, withdrawing funds and making basic transfers.
While those services have reduced transaction costs and improved convenience, they capture only a small part of the wider potential of digital finance.
The central bank wants greater adoption of digital savings, insurance, pensions, credit and investment products, particularly among people working in the informal economy.
Such services could help households manage financial shocks, accumulate assets and prepare for retirement, while also expanding the pool of domestic savings available to support economic activity.
The informal sector is especially important because many workers operate outside employer-based pension systems and conventional payroll banking arrangements.
Digital platforms can make it easier to offer small, flexible and low-cost financial products suited to irregular income patterns.
A trader, artisan or transport operator may not be able to commit to a fixed monthly contribution but could make smaller, more frequent digital payments into savings, insurance or pension products.
Expanding this type of usage would deepen financial inclusion beyond headline account-ownership figures.
It would also require financial institutions and fintech companies to design products that are simple, affordable and suited to the needs of lower-income and less financially sophisticated customers.
Mr Kumah said fraud and cybersecurity remained among the most significant barriers to wider adoption.
As digital transactions grow, so too does the exposure of customers to identity theft, social engineering, unauthorised transfers and other forms of electronic fraud.
Even isolated incidents can weaken confidence across the market if customers believe that digital platforms are unsafe or that complaints will not be resolved quickly.
The Bank of Ghana’s regulatory strategy will therefore need to combine innovation with stricter requirements for cybersecurity, data protection, transaction monitoring and incident response.
Consumer-protection standards will also be critical.
Digital products must clearly disclose fees, interest costs, penalties and the responsibilities of customers and service providers.
Complaint-resolution systems must be accessible, particularly for users with limited literacy or little familiarity with formal financial procedures.
The central bank’s emphasis on proportional regulation suggests that requirements may vary depending on the size, complexity and risk profile of individual providers.
A small fintech offering a limited payment service may not require the same supervisory framework as a large institution handling deposits, credit and millions of daily transactions.
Such differentiation can reduce unnecessary compliance costs while ensuring that higher-risk activities receive closer scrutiny.
But proportionality must not become regulatory weakness.
The rapid growth of digital finance creates links among banks, mobile money operators, payment service providers, telecommunications companies and technology vendors.
A failure at one point in that network can disrupt services across several institutions or expose large numbers of customers to losses.
The Bank will therefore need to monitor not only individual firms but also the resilience of the wider ecosystem, including outsourced technology providers and shared infrastructure.
Financial literacy is another important component of the strategy.
Customers must understand how digital products work, how to identify fraudulent messages and what steps to take when a transaction is disputed.
Education campaigns will need to move beyond general warnings and provide practical guidance tailored to different groups, including informal workers, rural communities, older users and first-time customers.
For financial institutions, the shift from access to usage presents a commercial opportunity.
Banks and fintech companies can deepen customer relationships by moving beyond payments into savings, credit, insurance and wealth-management products.
But the transition will depend on trust.
Customers are unlikely to keep larger balances or make long-term financial commitments on platforms they regard as insecure, expensive or difficult to understand.
The Bank of Ghana’s position is that innovation and regulation can reinforce each other when rules are designed to support responsible growth.
A credible framework can give consumers confidence, provide certainty for investors and allow legitimate providers to compete without being undermined by unsafe or fraudulent operators.
Ghana has made substantial progress in extending financial access through mobile technology.
The harder stage is converting that access into meaningful financial participation.
That will require stronger product design, deeper consumer education and regulation capable of encouraging innovation while responding quickly to new risks.
The central bank’s challenge is therefore no longer whether digital finance should expand, but how to ensure that its growth produces wider economic benefits without exposing consumers or the financial system to instability.
