EOB – APR 2023 – L1 – Q7 – Challenges in Electronic Banking

Discuss four challenges banks face with electronic banking.

Question

State and discuss any four challenges or drawbacks banks face with electronic banking.

(20 marks)

Answer

As a fintech and risk expert with experience at Ecobank Ghana, electronic banking has surged post-2019 cleanup, but challenges persist under BoG’s Cyber and Information Security Directive 2020 and Act 987, impacting operations amid 2025 digital trends.

Cybersecurity Threats: Banks face hacking, phishing, and malware, leading to data breaches and losses. In Ghana, incidents like the 2022 mobile money frauds cost millions; mitigation via encryption and BoG-mandated audits is costly, straining resources.
Regulatory Compliance Burden: Adhering to evolving directives like BoG’s Outsourcing Guidelines increases operational costs. Universal banks like GCB struggle with fintech partnerships, risking penalties for non-compliance, as seen in post-DDEP scrutiny.
Infrastructure and Accessibility Issues: Poor internet in rural areas limits e-banking reach, exacerbating inclusion gaps. Rural banks face downtime risks, per BoG’s sustainable principles, hindering profitability and requiring heavy investments.
Fraud and Customer Trust Erosion: Identity theft in e-transactions erodes confidence, with drawbacks like disputed charges. BoG reports highlight rising cases; banks counter with biometrics, but false positives frustrate users, demanding ethical balance for resilience.