Kenya Capital Markets Authority: Supporting the Growth of the Markets Through Financial Technology and Innovation

Paul Murithi Muthaura, Chief Executive of Capital Markets Authority in Kenya, talks about the importance of financial technology and innovation in order to support the growth of the markets.

“Building from the last four years where Capital Markets Authority has been consistently recognized as the most innovative capital markets regulation in Africa, we have been doing a lot of work internally and with our stakeholders around how we can create the right kind of regulatory environment that can support as much uptake of financial technology and the use of innovation to try to support the deepening and growth of the markets. One of the key tools we have put in place is the establishment of what is known as a regulatory sandbox which creates a safe space for different innovators to come and engage us as the regulator much less on a checkbox or compliance basis and instead through a more open discussion around what the key market development initiatives are, the outcomes they are trying to achieve, and how we can then build the right kind of regulatory response of framework to support them to fully leverage that. In that context, we are seeing a lot of creative solutions, especially in the space of creating new ways to approach product dissemination, be it through Blockchain instruments or better leveraging of the very well established mobile money practices and trends in the country, and also looking much more critically at tools we can put in place to reduce the cost of compliance for licensed intermediaries in terms of regulatory technology, innovations in reporting, and streamlining the way we collect information and our ability to analyze and respond to that information. One of the first steps we are seeing in terms of leveraging of Blockchain is using Blockchain for KYC (Know Your Customer) so that we can start building a centralized platform through which to conduct customer due diligence or customer analysis for the entire financial sector. This in turn significantly reduces the costs and delays that go into account opening and the ability to trace information in a timely manner while doing inquiries. Another area we see this is especially in the crypto assets space and how we can use Blockchain technology to build alternative ways to structure products and then disseminate them and, subject to cryptocurrency considerations, also be able to pay for them”, says Paul Murithi Muthaura.

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