Central Bank Anniversary Lecture-President Michel urges banks to modernise |19 November 2011

 
Guests listen as President Michel (photo right) delivers his address

Mr Michel made the call in an address at the Central Bank anniversary lecture entitled: Technological Innovation Driving Financial Services at the International Conference Centre yesterday evening where guests listened to a presentation by the chairman and chief executive of Polaris Software Lab, Arun Jain.

“... when it comes to innovation I cannot say I am satisfied with what the institutions are offering to their clients. For instance, today not one single bank in Seychelles offers full internet banking services to their clients!

I am encouraged, however, that some of our banks have indicated that this will be forthcoming,” said Mr Michel.

He noted that his government and the Central Bank of Seychelles (CBS) have made significant strides to improve the regulatory framework in which financial institutions operate, and will continue to ensure that the institutional and legal frameworks remain up to date with the financial innovations. 

“I applaud the efforts of our public institutions which have grasped technological changes, and which have already brought about significant improvements in the delivery of their services.

“I take the opportunity to congratulate the Central Bank for being one of our institutions that has adopted technological advances to its benefit,” said the President. 

He referred to the recent investment of the CBS in its integrated CORE banking platform which has allowed the bank to, among other things, increase the volume of transactions it processes, reduce risks associated with a multitude of computer software, minimise security risks, provide real-time balances to government and commercial banks, and enable “straight-through” processing.

The President noted various forthcoming projects envisaged by the bank like its initiative for the automation of cheque clearing, which will mean that the exchange of paper cheques between banks for the settlement of personal and business transactions will soon be a thing of the past.

Mr Michel also urged financial institutions, especially the commercial banks, to do more to help our economy.
“We have a duty to empower our people. We have a duty to help them better their situation, to do business, expand and create more wealth, more opportunities… But they cannot do so without access to affordable credit. Credit remains one of the fundamental drivers of economic growth. Banks can and must reduce interest rates further. Bank spreads today are higher than they were before we implemented our economic reforms three years ago, one of the only few black spots when we look at our overall performance during that period. So I urge banks, once again, to go back to the drawing board and contribute more to our economy through more affordable lending rates. At the same time let us do more to encourage the savings culture through more attractive savings rates.”

Central Bank governor Pierre Laporte said the bank has recently made significant strides towards automation, noting that the number of cheques issued by the bank has dropped as it makes direct transfers into clients’ bank accounts.

He said he is looking forward to more banks offering such services as mobile telephone top up, and noted one of the telecommunications companies is looking to offer mobile banking soon.
Mr Jain said Seychelles has a chance to offer banking technology services to African countries because we understand their needs best.

He added that we are lucky to have the chance for automation now rather than earlier, because we will adopt the most advanced technology unlike developed countries which use old fashioned technology.
 
On Monday Nation hopes to come back to some of the other key issues raised at the opening of the Central Bank anniversary lecture.