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Technology-driven innovation in finance, more commonly referred to as fintech, has become an increasingly important part of financial services.
The South African Reserve Bank (SARB) aligns with the Financial Stability Board’s working definition of fintech as “technologically enabled financial innovation that could result in new business models, applications, processes, or products with an associated material effect on financial markets and institutions and the provision of financial services.”
This all-encompassing definition of fintech refers to the impact of fintech on the financial sector, including various innovative technologies and innovations by fintech firms and established financial institutions. Fintech has the potential to offer benefits to consumers through improved access to financial products, greater flexibility, more efficient delivery and service, and competitive pricing.
The SARB recognises the importance of harnessing these benefits and opportunities while also managing the risks and potential policy trade-offs in developing appropriate policy, regulatory and supervisory frameworks in response to fintech.
The SARB’s Fintech Unit was established in August 2017 to explore the implications of fintech innovation for the SARB and financial services in South Africa in a structured, organised and proactive manner. The core value proposition of the SARB’s Fintech Unit is to improve the understanding of the impact of fintech in financial services by:
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Providing through leadership on a range of fintech topics (research; market studies; outreach sessions)
Act as a bridge between SARB and industry on fintech e.g. through outreach sessions; fintech events; roundtables
Stay abreast of fintech developments through monitoring and environmental scanning
Assist in formulating policy across fintech priority areas (crypto assets; stablecoins; CBDCs; AI; open finance, etc.)
Gain deeper understanding of emerging technologis in practical ways (regulatory sandbox; practical exploration – PoCs; prototypes etc.)
The Fintech Unit continues to play a leading role in areas such as crypto assets, central bank digital currencies, open finance, financial markets tokenisation and the application of artificial intelligence in the financial sector.
It developed the SARB’s initial position on innovation facilitation structures (such as regulatory guidance units and sandboxes), which was instrumental in further dialogue with the broader regulatory community.
The team has also been responsible for initiatives such as hosting the Southern African leg of the Global Fintech Hackcelerator, launching the Innovation Hub under the Intergovernmental Fintech Working Group (IFWG), as well as managing Project Khokha and Project Khokha 2, and the 2025 G20 TechSprint.
In response to the rapidly evolving nature of fintech, South Africa established the IFWG in 2016 as a forum for collective sensemaking among regulators and policymakers on fintech-related matters.
The main purpose of the IFWG is to enable a more coordinated approach to developing policy and regulations in response to the impact of fintech. The IFWG launched the Innovation Hub in 2020, with three innovation facilitators: the Regulatory Guidance Unit, the Regulatory Sandbox and the Innovation Accelerator. The SARB’s Fintech Unit co-leads the IFWG Innovation Hub with the Financial Sector Conduct Authority and supports the overall functioning of the IFWG.
Find the latest publications by the IFWG here.
Overview of the IFWG Innovation Hub
The Regulatory Guidance Unit (RGU) helps market innovators to resolve specific questions regarding the policy landscape and regulatory requirements
The Regulatory Sandbox (RSB) provides market innovators with an opportunity to test new products and services that push the boundaries of existing legislation and regulation responsibly, all under the responsible supervision of relevant regulators
The Innovation Accelerator provides a collaborative, exploratory environment for financial sector regulators to learn from and work with each other, and the broader financial sector ecosystem, on emerging innovations in the industry.
For further information on the IFWG Innovation Hub, visit the IFWG website here, or view the FAQs here.
IFWG
BIS Innovation Hub
FSCA Fintech
SARB-Global Fintech Hackcelerator @ Southern Africa 2019
Project Khoka 1 Launch
If you have any further questions please do not hesitate to contact us at
sarb-fintech@resbank.co.za.
