One of the questions that were tackled in detail at the Swaziland Economic Conference 2017 is whether Swaziland is ready for the fast growing crypto currency which is quickly gaining momentum in other countries.

This question was raised by First National Bank Swaziland (FNB) Chief Executive Officer Dennis Mbingo, who was leading a session facilitated by his bank under the topic ‘Innovation and Technology in the Financial Sector’.

He made an example of Bitcoin, a currency that was created in 2009, where transactions are made with no middle men and with no need for bank services. There are no transaction fees and it can be used to buy merchandise anonymously, which also proved to be a cause for concern by participants of the session. Other people purchase Bitcoins and keep them with the hope that their value will increase over the years.

While the CEO noted that the concept behind it may have its merits, he said just as regulators worldwide perceived the crypto currency to be a headache, he was of the same view. “I am not here to sell Bitcoin but I am using it as an example as it is the most popular right now. There is this thing that is emerging, which financial experts and regulators are struggling with. It is not owned by anyone, not controlled by anyone, and is not regulated by anyone yet it is getting acceptance around the world.”

The concerns that were raised by Mbingo about crypto currencies were that it is borderless and has no state control, but uncertainties over legal protection, and the fact that it still remained a regulator headache, and susceptible to crashes like other ‘currencies’. He said however that like other currencies, its strengths are also its weaknesses and just like the US dollar can rise and fall, it is also to be expected that crypto currencies can rise and fall.

Mbingo added that a major cause for concern was how Swazis who do not have enough knowledge are keen to be a part of emerging trends without really understanding them, saying it is unfortunate that even if the Central Banks would continue to say they are not regulating it, this would not stop people from participating as it is not country designated.

“This raises the question that; are we ready as a country and how are we going to protect those who do not know enough?” questioned the CEO before opening the floor for comments and suggestions. The participants of the session, which comprised of representatives from different banks, the regulator, as well as the Swaziland Revenue Authority (SRA), also raised a number of concerns about Bitcoins, although they noted that there is a need to get informed on the merits and demerits of crypto currencies.

Montigny Investments Executive Director Andrew Le Roux said there is a lot of fear around crypto currencies because they cannot be controlled. He said however that there is a certain inevitability around crypto currencies as the world becomes more global and platforms become more widespread.

“The question is; how do we as a country survive or even benefit from it? Let us look at our regulatory environment, our policy environment and ask ourselves if we would rather concentrate on consumption taxes or income taxes. I think it is more about how we respond to it than go into a cave and say ‘this thing must go away’ because we do not know it. Bitcoin may come and go but I think the concept behind it of global platforms is here to stay,” he added.

Le Roux is also the president of the Federation of Swaziland Employers and Chamber of Commerce (FSE&CC).

‘Swazi laws irrelevant to new technology trends’

Participants at the Swaziland Economic Conference 2017 have punched holes into the process of drafting and passing of laws in the country in as far as keeping up with new global trends.

While it was noted that there are changes occurring at a fast pace in innovation and technology, it was also pointed out that there is a need for the laws to ensure that such innovations are regulated and people are protected.

One of the participants made an example of internet fraud and cyber crime which continue to be on the rise worldwide, while in Swaziland there are still no laws in place to protect people from such incidences. A participant said other countries are at a point where they are adding layers on their cyber security and improving it and meanwhile Swaziland has not even started.

It was also suggested that there should be time frames attached to Bills when they are taken to parliamentarians so they are able to adopt them in time, as currently the process is too long and by the time they are adopted they are no longer relevant.
Meanwhile, it was noted that experts in the various sectors of the economy could also do more to assist the legislators as they draft such laws, as the process is transparent and they are usually open to suggestions from the public.

The question that was posed was; ‘Are experts in the fields doing enough to produce policies that will guide our legislators or are we also seated folding our arms waiting to see the end result?’ It was noted that innovation is happening at a very fast pace and therefore it is unfair to put all the blame on legislators to keep up with all these new trends.

‘Financial sector automation will ultimately replace traditional jobs’

First National Bank Swaziland Chief Executive Officer Dennis Mbingo says the predicted time for technology to replace traditional jobs may happen sooner than anticipated.

He said financial sector automation would ultimately replace traditional jobs as the automotive systems are already proving to be more effective than traditional methods.

Mbingo said running banks these days means they had to run two companies under one umbrella, the traditional bank and well as the digital bank, making an example with the First National Bank where they have implemented the automated system for processing loan applications which he said had significantly decreased loss.

“When I first joined the bank loans were processed through filling a lot of documents, which was a long process but now 90 percent of the decisions are automated. Surprisingly, the loss experience with automated decision making is now far less when compared to when the loans were not automated,” he said.

Mbingo also said people’s decisions are sometimes influenced by compassion even when people do not fully qualify while systems that are currently making the decisions do not have compassion.