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Delivered by: Dr. Shamsudeen Usman
Deputy Governor - Financial Sector Surveillance Central Rank Of Nigeria




I feel honoured to be invited to make these brief remarks at the opening of this International Conference on Electronic Commerce and Telecommunications in                                                                                                                        

Nigeria. The theme of this conference which is Electronic Commerce and Telecommunications- Maximising the Benefits of the Digital Economy" is not only apt, but also timely.

The internet being an electronic distribution channel offers several clear advantages to financial services institutions. One of such advantages is that a company can utilize the self service model of the internet to deliver a variety of products or services to a worldwide audience without having to add considerable infrastructure or personnel resources. This could have a positive impact on the revenues and profitability growth of such a company. It can enhance the quality of the interaction between financial services institutions and their customers, thus affording them the opportunity to increase their market share. In addition, it has image enhancing attributes that enables business organizations to create a range of innovations.

E-commerce however, exposes institutions/companies to a lot of risks which amongst others include strategic, operational, security, reputational, legal, money laundering, cross border, credit, liquidity, market, foreign exchange and a host of others. Accordingly operators will need to put in place control measures that will mitigate/minimize the risks associated with e-commerce while the regulators are concerned with maintaining market confidence, protecting the consumers, reducing financial crime and promoting the safety and soundness of the financial system. In this regard, the regulators will need to seriously consider the implications of such risks and their impact on businesses especially those of banks and other financial service providers as well as the economy as a whole.

In Nigeria today there is a growing interest & awareness of c-business coupled with a proliferation of websites especially by Nigerian banks, which was facilitated by advances in telecommunications and information technology. Already a number of Nigerian banks' websites have the capability of supporting and actually permitting the conduct of e-banking and e-commerce. This is inevitable if the banks are to be able to compete at the global financial landscape.

In "addition, electronic commerce in Nigeria presents major challenges to not only the regulatory authorities and government agencies but also the operators. These include amongst others:-

i           The need to have in place certain basic infrastructural facilities such as effective and efficient electricity supply and telecommunications. "

ii.         Skilled manpower to use and maintain internet resources.

iii.        A legal and regulatory framework that will guide the conduct of electronic

commerce in Nigeria. Governments around the world are waking up to the

fact that the Internet and e-commerce need to be regulated. The Indian Parliament, for example, has recently passed an Information Technology Act, which lays down the framework for electronic commerce in India, while other European and U.S. governments are in the process of framing their own laws to regulate the Internet. The CBN is therefore of the view that given our level of development, Nigeria should draw from the experience of countries such as India, Hong Kong etc, by way of introducing some form of regulation for e-commerce not only because of the need to guide the conduct of participants, but also because of the need to protect the consumers. Towards achieving this objective, there is the need for close co-operation and co-ordination between the National Assembly, the relevant regulatory authorities and Government agencies as well as the private sector, in order to facilitate the development of robust legal and regulatory framework for electronic commerce.

iv.        Lack of awareness/education on the part of Nigerian consumers/businesses

of the full potentials and benefits of the internet which in turn will continue not only to hinder the acceptance and growth of e-commerce, but encourage

the restricted use of the internet in the country to sending and receiving e- mails as well as research by students/academics. In addition, the predominance of the use of cash for transactions means that, the benefits derivable from using the internet to drive the economy may not be realized. Such benefits include moving money electronically thereby allowing for larger and more frequent business deals to be made.

v.         Combating/containing cyber crimes, cyber fraud, money laundering and other financial crimes without compromising the individual privacy.

Ladies and Gentlemen, I am optimistic that this conference is going to discuss comprehensively the challenges raised above, raise other critical issues bordering on electronic commerce and proffer solutions to them. Please note that as new capabilities and technologies are incorporated into our. financial services environment, the CBN, in the discharge of its very special responsibilities, will not compromise the safety and soundness of the payment and banking systems as it will continue to monitor applications and developments in the field of not only e-banking but e-commerce in the country.

I thank you for your kind attention and wish you fruitful deliberations.

Will continue to support and encourage such innovative application that pass the value-added and profitability test.

In conclusion, I wish to assure you that as the new capabilities and technologies are incorporated into our financial services environment CBN, in the discharge of itís special responsibilities, will not compromise the safety and soundness of the payment and banking system as we will continue to monitor application and development in the field of e-banking and e-payments in the country.

I thank you for your attention.







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