More innovation needed for financial market – CBN

Operators in the country’s financial market need to leverage technological innovations to drive the growth of the market, while forestalling a possible occurrence of a market failure, the Director, Banking and Payment Systems Department, Central Bank of Nigeria, Dipo Fatokun, he said.

He said a lot was still needed to be done as far as technologies are concerned, citing the system failure that paralysed the market in April 2015.

He said, “Despite our favourable global rating, there is still a lot of work to be done to achieve improvement in the market especially in treasury-related operations.”

As a market regulator, the CBN, he said, had laid out some critical measures to forestall future systemic risks and improve on the market operations’ effectiveness in order to restore practitioners’ confidence.

“The first measure taken by the CBN is using its adapter to interface with the FMDQ platform, to enhance straight-through process settlement of Over-the-Counter transactions. The second step is the bank’s interface with the Debt Management Office’s banking application system for the bidding, issuing and allotment of government securities. The impact of these two measures has been great,” he said.

He charged operators to engage in incisive deliberations to fashion out new strategies on how the CBN as the regulator could foster effective and efficient treasury operations. “We all look forward to a future market where process efficiency and productivity get better and easier to achieve, and the prohibitive transaction costs of inefficiency become lower,” he said.

Fatokun added, “In 2015, the World Economic Forum, in its Global Competitiveness Report (for 2014-2015), affirmed the relative sophistication, technological innovation, competitiveness and overall stability of the Nigerian financial market, and ranked it at the 67th position of all the 144 countries appraised globally.”

Also speaking at the forum, the Head, Cash Management Operations, Citibank Nigeria Limited, Mrs. Chika Sanni, said the treasury operations area is responsible for processing, confirming, settling and reconciling the transactions completed in the front-office.

A successful treasury operations team, according to her, was therefore an essential part of any treasury business.

She said, “While not a profit centre, mistakes or errors in operations can potentially be very expensive and damaging for the firm.”

[Punch]

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