The government and the Economic Development Board of Mauritius are working to position Mauritius as an International Financial Centre of excellence in the African continent. The 2019-2020 budget which was recently presented included several measures that will be taken to establish the country as a Fintech hub.
It was revealed that the Financial Services Commission will use technologies such as Robotics and Artificial Intelligence to develop innovative financial advisory services. These systems will help companies to study the businesses they are investing in and they will provide reliable recommendations based on an analysis of the market. Moreover, a new licence will be introduced for fintech Service providers and the government will encourage self-regulation for financial activities in consultation with the United Nations Office on Drugs and Crime. The introduction of e-signatures and e-licences on a pilot basis and the ability to create crowd-funding campaigns as licensable activities will also be part of the new innovations implemented.
For Mauritius to be recognised as a fintech hub of choice, a new taxation system for banks and regulatory guidelines are also required. This is because, currently, developments in the financial and technology sector are focussed on payment activities and this market is still dominated by traditional institutions. While there is a lot of interest among entrepreneurs to invest in new technologies, the fintech industry is still emerging. It is not completely part of the country’s financial regime and start-ups have not begun to displace conventional institutions yet. It is expected that the establishment of these organisations in the financial market will lead to two possible outcomes:
- In the long run, Mauritius’s financial regime will become more conversant with the fintech market and the products it offers. This will lead to new technologies and companies displacing traditional payment service providers.
- Traditional financial institutions, such as banks, will adopt new technologies to implement innovative solutions. It is very likely that they will partner with fintech companies for co-development of facilities and for testing among consumers.
Banks have already undertaken the necessary measures to keep up with the rapid changes taking place in the country so that they form part of the fintech sector and start-ups can get their activities running smoothly. For instance, The Bank of Mauritius has already issued specific guidelines. The first one is related to Internet Banking. This sets out a regulatory framework that all institutions should adopt if they offer Internet Banking services in Mauritius. This recommendation presents the strict minimum standards that firms must observe and it also lists out the requirements and processes involved in obtaining approval from the Bank of Mauritius to offer these services. It is to be noted that fintech firms are free to adopt standards and practices that are more stringent if they suit their operations and circumstances. Other changes are related to mobile banking and on the infrastructure behind this solution. They have been devised to promote a sound and reliable financial system in Mauritius. These are effective regulatory measures that will help Mauritius become the fintech hub of the African continent.