Financial Crime World

SENEGAL: Compliance in Banks Remains a Concern Amidst Growing Digital Landscape

Despite significant progress in digitization, compliance in banks in Senegal remains a pressing issue.

Limited Access to Financial Services

According to recent data, the country’s population has limited access to financial services, with an estimated 70% of adults unbanked. This highlights the need for improved financial inclusion and accessibility.

Mobile Money Landscape

The mobile money landscape is also underdeveloped, with only 20 registered agent outlets per 100,000 people. Additionally, Senegal lags behind in terms of ATM availability, with just 10 ATMs per 100,000 people.

Challenges Faced by the Banking Sector

  • Limited account ownership rate: The country’s account ownership rate stands at just 30%, with women and rural populations disproportionately affected by limited access to financial services.
  • Disparate digital payments adoption: Digital payments remain a relatively new phenomenon in Senegal, with only 10% of respondents reporting using mobile money or other digital payment methods in the past year.

Regulatory Efforts

Senegal has introduced measures to enhance financial consumer protection (FCP), including:

  • Establishing a FCP legal framework and supervision structure
  • Introducing electronic money regulations to govern financial institutions’ ability to issue electronic money

Innovation and Digitalization

  • Senegal has made strides in developing its Network Readiness Index, which measures factors such as technology, people, governance, and economic impact.
  • The country’s Innovation Capability Score has also improved, driven by initiatives aimed at fostering collaboration and research.

Conclusion

While Senegal has made progress in developing its financial sector, compliance remains a significant challenge. To unlock its full economic potential, the country must continue to invest in initiatives aimed at:

  • Enhancing financial inclusion
  • Improving digital payments
  • Promoting innovation

By addressing these challenges, Senegal can leverage the growth of its digital landscape to drive economic development and improve the lives of its citizens.