[Interview] Edouard Docteur, Chief Delivery Officer, Global Voice Group
Edouard Docteur is the Chief Delivery Officer at regulatory technology developer and Big Data Analytics firm Global Voice Group (GVG). GVG assists governments to increase efficiency, revenue, transparency and compliance, through intelligent big data solutions applied to vital sectors of the economy, including telecoms, fintech and the whole mobile and digital ecosystem.
Edouard has dedicated the last 14 years to delivering reliable and secure SupTech (Supervisory Technology) platforms and services to Governments and Regulatory Bodies in Africa. Through a cohesive team of on-site and remote experts, he implements strategic decisions to improve operational efficiency and customer satisfaction.
In this interview, he talks to Africa Business Communities on how data-driven transparency can boost compliance in key African economic sectors.
You recently released a detailed report on data-driven transparency. Briefly take us through this report.
With the massive increase in digitization of services, we believe African governments must ensure the implementation of effective monitoring solutions in key economic sectors – including mobile money. The whitepaper highlights how governments in Africa must invest in regulatory frameworks and leverage technology to ensure compliance, streamline taxation processes, protect end-users’ data, improve Know-Your-Customer (KYC) procedures, and mitigate risks associated with money laundering, financial terrorism, and scams. The whitepaper sheds further light on Mobile Money's impact on local economies and provides insights into data acquisition to boost financial inclusion and governance. We spotlight the examples of emerging economies like Congo, Ghana, and Rwanda who have adopted data-driven approaches to tackle fraud, money laundering, and revenue leakages.
The report extensively examines the adoption of new technologies and the incorporation of global, regional, and national policies with a particular emphasis on mobile money, financial inclusion, data governance, and their impact on African economies. Why are these policies so important?
In essence, these policies are foundational for sustainable economic growth, social progress, and technological advancement in Africa. They address both immediate needs, like financial access, and long-term challenges, like data protection in a digital age. Given Africa's youthful population, rapidly growing economies, and increasing digital connectivity, these policies are timely and can determine the trajectory of the continent's future.
In many parts of Africa, traditional banking infrastructure is sparse, making access to financial services challenging for many citizens, especially in rural areas. Mobile money platforms like M-Pesa in Kenya have revolutionized the way people transact, allowing even those without a bank account to send, receive, and save money.
As digital services grow, ensuring that users' data is protected becomes crucial. Proper data governance can instil confidence in users, promote digital adoption, and prevent misuse of data. High-quality data governance ensures that decisions, whether at the governmental or business level, are informed by accurate and timely data. This leads to better policy and government strategies.
Harmonizing policies across countries can promote inter-country trade, financial integration, and shared growth, leading to lead to the growth of new sectors and industries, thereby diversifying the economic base, which is vital for resilience against external shocks. Clear and favourable policies can attract both domestic and foreign investments. For instance, a supportive mobile money regulatory framework can draw fintech investments.
The report also highlights the impact of remittances and mobile money on local economies and provides insights into data acquisition to boost financial inclusion and governance. Talk to us about these insights. What kind of data are we looking at?
Remittances and mobile money are having a profound effect on local economies in Africa, elevating the financial situations of many citizens. Data from the World Bank shows that remittances accounted for at least 10 percent of the GDP of emerging and developing countries in 2020. More data shows that as of 2022, international remittances sent to low and middle-income countries reached US$626 billion. Remittance inflows into Kenya for the month of May 2023 totalled USD 352.1 million compared to USD 320.0 million in April 2023, an increase of 9.9 percent. The cumulative inflows for the 12 months to May 2023 totalled USD 3,997 million compared to USD 3,992 million in a similar period in 2022, an increase of 0.1 percent.
With the implementation of the necessary technological solutions, African governments can easily assess the impact of policies in these sectors through the data they collect and analyse. This data can include the financial behaviours of citizens, including how these individuals manage their finances without traditional banking – do they use informal lending circles, keep cash at home, or use other methods? That can also expand to areas or demographics where there's potential for significant growth in financial inclusion with the right interventions.
Some African countries are already adopting data-driven approaches to tackle fraud, money laundering, and revenue leakages. Should this be a standard practice across all African countries?
I strongly believe so. Illicit financial flows are becoming more sophisticated as technology advances and traditional methods of curbing these vices are no longer adequate. The development of new revenue flows poses the same challenge. Data driven solutions equip governments and revenue authorities with the necessary tools to effectively monitor these economic segments and use technology to easily identify anomalies or concerning patterns. Countries like Rwanda and Tanzania have seen success with the adoption of this approach. Rwanda experienced a 250% increase in overall regulator’s revenue from ICT over 10 years, whilst Tanzania saw US$5 B in monthly average mobile money revenue verified and analysed by their system, with detailed metrics to better inform policies and decisions.
Is the data-driven approach really working?
Yes. The data-driven approach provides several benefits including actionability, accuracy and ethics and privacy. When applied judiciously and repetitively with a consideration of the local context, a data-driven approach has the potential to work very effectively in the domain of financial inclusion, remittances, mobile money, and governance. However, it's not a panacea; it needs to be complemented with on-the-ground insights, stakeholder engagement, and an understanding of the larger socio-economic ecosystem. Countries like Congo, Ghana, and Rwanda have seen great success from the data-driven approach. Ghana adopted a cutting-edge revenue tracking solution performing ongoing and automated verification of all revenue-generating events from the telecom sector. This has seen an average annual revenue growth rate of 20% in the sector since the solution was deployed.
How can regulators in Africa work with tech providers to increase this adoption?
There are several avenues for collaboration between African regulators and tech providers, which would increase the adoption of data-driven solutions. First is the creation of regulatory "sandboxes" where tech providers can test new solutions in a controlled environment without the usual regulatory restrictions. This allows for real-world testing and refinement before full-scale rollout to ensure that concrete solutions that meet the specific needs of the regulators are developed. Secondly is building platforms and systems that are interoperable. This ensures that various systems can work together seamlessly, promoting widespread adoption. Lastly is the promotion of cross-border collaborations through the facilitation of partnerships between tech providers in different African countries to share best practices, solutions, and drive the adoption of technologies that can work across borders.
How is this data-driven transparency or approach boosting compliance in key African economic sectors and enhancing economic development on the continent?
A data-driven approach can have profound positive impacts on compliance and economic development in Africa. When entities from businesses to governments harness the power of data, they can operate more efficiently, transparently, and responsibly, leading to sustained economic growth and development. However, it's essential to ensure that data is used ethically, protecting individual privacy and community rights. Regulatory authorities can use data analytics tools to monitor business activities in real-time, catching compliance issues before they become major problems, as well as to forecast potential compliance breaches based on past patterns, allowing for pre-emptive interventions. Automated systems can further identify suspicious transactions in real-time, minimizing financial fraud and expanding access to credit for previously underserved populations.
Enhanced transparency also means that when the public has access to data about government and business activities, they can hold these entities accountable, promoting good governance and corporate responsibility.
Key takeaways from the report?
There are several takeaways from the report, key of which is that of all the necessities identified by policymakers and regulators in the exercise of their functions, the need for accurate data is undoubtedly one of the most frequently mentioned. Readily available data can substantially improve the state of integrity and transparency in the digital financial ecosystem in emerging and developing countries. An effective data-driven approach requires much more than traditional reporting from the industry, it requires direct and comprehensive data collection by policymakers and regulators. This approach goes beyond does not simply promoting transparency, it enforces it across an entire sector. It also creates a strong incentive to comply, as non-compliance issues become transparent as well.
There are four key sectors of application, including regulatory compliance, policymaking, financial intelligence and financial inclusion.
While the use of these technologies in developing countries has been increasing in recent years, there were only 82 data centres in Africa in 2022 compared to thousands in Europe and the United States. Today, Africa represents only 1 percent of the global data centre market, while the continent houses 17 percent of the global population. Overall, this market is still at an early stage of development in Africa, with less reliable infrastructure (including power, Internet connectivity, and fibre backbones) and diluted resources to build and maintain these facilities.
Any closing remarks?
Data technologies have a crucial role to play in the good governance of the digital transaction ecosystem. In addition to their direct benefits in terms of regulatory oversight and revenue mobilization for governments and regulators, their implementation can also help build trust in digital financial services and, therefore, improve financial inclusion through increased use of these services by the unbanked population. Faced with an increasingly digitized environment, a growing number of policymakers and regulators are adopting these technologies.