Every year, business leaders challenge South Africa's policymakers and decision makers to make decisions that will result in a fair and open economic environment where businesses can grow and encourage more foreign direct investment.
These decisions include enforcing regulations that support and protect business growth and encourage the development of new enterprises. At the same time, regulations provide companies with a roadmap on how to comply with best practices for their operations, employees, and customers.
Last month, the South African Reserve Bank's Prudential Authority published a notice in the Official Gazette regarding the new mutual bank, which is reportedly one of four new banks to be established within the next few years. There is. It has recently been approved by the Financial Sector Conduct Authority (FSCA). Licenses 59 new crypto businesses and gives them the green light to operate in the country.
In this article, experts from various fields comment on the value of a favorable regulatory environment, how it has helped different industries, and what they would like to see more of from the government.
A fair and just ombuds industry
South Africa's regulatory environment leads in consumer protection. This can be seen in the introduction of new regulations such as the POPIA Act and the recent decision to combine banking, credit and insurance ombudsmen into one.
Saskia Stemmett, Head of Legal and Compliance at Everything.Insure, said: “Customers in the financial services industry can now lodge complaints with the newly established National Financial Ombud (NFO). ” says.
“The creation of the NFO eliminates the confusion created by four separate ombudsmen. Customers no longer have to decide which ombudsman is correct. They can now simply go to the NFO to bring their complaints. “There is, and the NFO will deal with it accordingly,” she continued.
This will also help improve industry efficiency and pool resources when it comes to handling complaints in the financial services industry. The establishment of NFO is part of our efforts to increase customer satisfaction, improve customer service and customer experience in the financial services industry.
IT, finance, and real estate that support Japan's largest industry
Some of the country's largest industries are still going through a period of transformation around the introduction of technological tools to improve labor practices and business processes.
One of the most pressing challenges in these changes to the workforce is finding a balance between hybrid and in-person work. Technology-related changes include the discovery and implementation of new programs such as collaboration and productivity tools to foster greater employee engagement, increased efficiency, and improved communication.
“Although the information and communication technology (ICT), finance and real estate sectors are not South Africa's largest industries, they are still important industries in their own right. In 2021, the country's ICT sector recorded revenues of R243.6 billion, with finance, The real estate and business services sector contributed an estimated R1.09 trillion to gross domestic product (GDP) in 2022. In the coming years, these industries will experience massive growth. South Africa's economic development and growth , and play a vital role in our ability to compete at a global level,” said Andrew Bourne, Regional Manager for Africa at Zoho.
He added: “Companies need to ensure that their internal policies and regulations align with the needs of how the organization changes and needs to keep technology up to date.” The major technological bottlenecks currently facing companies in these sectors include modern collaboration and production, which has emerged as remote work environments mature and become permanent work options. Because it involves sexual issues.”
Stricter regulations required in some areas
Given South Africa's recent gray listing by the Financial Action Task Force (FATF) due to inadequate anti-money laundering processes, there is an urgent need for strict government regulation of foreign exchange transactions.
For example, the recently introduced Advance Payment Notification (APN) was a big step in the right direction. These require an importer to notify SARS of his advance import payments in excess of R50,000 to overseas suppliers. By shifting the responsibility for ensuring transparency and traceability of cross-border transactions to business owners and individuals, it becomes more difficult for illicit funds to flow unnoticed.
However, Future Forex CEO Harry Scherzer commented: Tighter regulation and greater transparency can attract more investment, strengthen the currency and foster a more robust economy. ”
Opportunity for action to address global risks through appropriate regulation
Localized strategies leveraging investment and regulation have proven to reduce the impact of unavoidable risks, helping us prepare and ensuring that both the public and private sectors can deliver these benefits to everyone. can play an important role in expanding. This is according to the 19th edition of the World Economic Forum Global Risks Report 2024, published by Marsh McLennan in partnership with Zurich Insurance Group.
The collective actions of individual citizens, businesses and nations may seem insignificant on their own, but when they reach critical junctures they can move the needle on global risk reduction. .
The report's findings show that global treaties and agreements are most likely to spur action. More reliable emissions reductions remain the fastest and most effective means of avoiding or mitigating potential climate tipping points. However, there is evidence to suggest that some of these tipping points are already fixed, so the proportion of adaptation to mitigation efforts needs to be rebalanced through national and local regulation as a complementary goal. be.
Expanding access to existing adaptation solutions, including early warning systems, is essential. Countries and development banks need to work closely together to reduce private sector investment risks in priority sectors and markets.
Strengthening Cryptocurrency Regulation Keys to Improve FATF Ratings
Regulation is especially necessary when combating money laundering and financial crimes related to cryptocurrencies. This is the view of Andre van den Bergh, director of banking and treasury at CMS South Africa, who believes stronger crypto regulation is key to improving South Africa’s FATF rating.
However, he cautioned that “regulation alone may not be enough to combat money laundering and financial crimes related to cryptocurrencies.” Addressing these issues requires a collaborative effort involving various institutions and stakeholders, including banks, financial institutions, and government agencies. ”
To this end, initiatives such as the Rapid Payments Program (now known as PayShap) launched by the South African Reserve Bank in 2023 are typical of such collaborations and are designed to modernize payment systems. , which aims to reduce the number of unbanked individuals in the country.
Zakir Mohamed, director and head of corporate investigations and forensics at CMS South Africa, said South Africa's gray listing by the FATF not only cast doubt on the country's ability to fight financial crime, but also caused reputational damage and He added that it highlighted the failure of crime prevention efforts. Regulating the flow of funds through both traditional financial institutions and alternative financial forms such as virtual currencies.
The FATF gray list is a clear reminder that countries need to take stronger measures to combat a range of financial crimes, including those related to money laundering and cryptocurrencies, and President Cyril Ramaphosa said this “It raises significant concerns about the state of our nation's financial institutions, law enforcement and investment climate.”
