PhD defence: Jean Calvin Abela

Impact of ICTs on the CEMAC banking sector

Jean Calvin Abela
Banque des États de l'Afrique centrale (BEAC)
Cerdi, Université Clermont Auvergne

Jury

Blaise Gnimassoun, Université de Lorraine
Michael Goujon, Université Clermont Auvergne
Bruno Cabrillac, Banque de France
Delphine Lahet, Université de Bordeaux
Samuel Guérineau, Université Clermont Auvergne

Abstract

New financial technologies (fintech) have been on the rise in recent years. The aim is to analyse the situation in the Central African Economic and Monetary Community (CEMAC) in terms of the appropriation of these technologies and their impact on financial stability. We conducted a literature review to identify the transmission mechanisms of fintech on financial stability. We also conducted two surveys. First, we administered a questionnaire to all commercial banks in CEMAC to assess their degree of appropriation of fintech. Secondly, we conducted a field survey to identify the fintechs in operation and their areas of expertise. The results showed that fintech as a service is not widely used by commercial banks in CEMAC. Their impact on financial stability in the CEMAC-community is therefore limited. Furthermore, 82.5% of CEMAC banks have a website and offer internet banking and mobile banking services. Finally, of the 35 fintechs surveyed, almost 70% offer online payment services via mobile money. Moreover, according to the results of the survey in the first chapter, commercial banks in CEMAC felt that they had made financial and productivity gains by adopting new technologies (internet banking and mobile banking). However, no study has been carried out to support this hypothesis. In this regards, We collected banking data from 2010 to 2017 from the Commission Bancaire de l'Afrique Centrale (COBAC), the CEMAC regulatory body. We estimated a fixed panel model on the return on assets ratio. The results show that the introduction of internet banking and mobile banking services has a negative impact on the profitability of commercial banks in the CEMAC. This result is contrary to the intuition of commercial banks at the time of the survey. It could be justified by the fact that the heavy investments made at the time of implementation put a strain on profits in the first year. The absence of long-term data could also explain this result. As for the Bank of Central African States (BEAC), it is unable to provide economic agents with sufficient quantities of small-denomination notes and coins. This situation, which creates a problem of monetary inclusion, is said to be due to the high cost of producing and distributing banknotes and coins. The proposal is to gradually digitise the CFA franc in order to reduce the cost of putting notes and coins into circulation. The Central Bank Digital Currency (CBDC) is a candidate solution for digitisation. However, the recent nature of the technology underlying CBDC and the limited number of use cases do not guarantee the success of this solution in the CEMAC countries. In the short term, it is proposed that a central bank mobile money (MMBC) be introduced, to be issued by the Central Bank in partnership with mobile phone companies, which already distribute mobile money.

Keywords

FINTECH, CBDC, CEMAC, Central bank mobile money, Internet banking, Mobile banking.

www.theses.fr/en/s362826