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Global Financial Markets Need Another Bretton Woods – says Luno

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July 1st marked the 75th anniversary of the start of the Bretton Woods conference, held at Mount Washington Hotel in the United States (1st to 22nd July 1944). The conference created the financial system we use today, establishing the rules which still govern our economies.

Luno, a global cryptocurrency firm, recently carried out a ‘Future of Money’ survey in seven key markets to analyse the understanding and attitudes that individuals across the globe have developed towards the financial system.

The findings indicate that the respondents from emerging markets are seeking a change to the way global money exchange and banking operates today.

The Bretton Woods conference, also known as the United Nations Monetary and Financial Conference, created a new way of managing and exchanging value between individuals and organisations primarily based on the needs of developed countries and markets.

Marcus Swanepoel, CEO of Luno, says: “The survey results show that emerging markets are seeking a change to the financial system which was created 75 years ago.  The increase in population, changes to the distribution and inequality of wealth, at a time of tremendous steps forward in technology means that the current financial systems need to undergo another Bretton Woods moment.”

“Individuals in these markets cannot afford to, and should no longer need to, pay extortionate exchange rates, accept national devaluation or lose out when they simply transfer money between individuals or entities. Access to a more inclusive financial system will enable people everywhere to think of new and better ways of exchanging value and technology can play a key part here.”

The survey showed that respondents have three main areas of concern with the existing financial system: economic benefit, security and transparency.

It was also very clear that where they don’t have immediate access to wealth in the way that those in developed markets do, the respondents demonstrated a greater understanding of how it should work for them and are open to being more creative with how to maximise the value of what they do have. In more affluent societies knowledge, protection and understanding of money are less well developed.

For example, when asked how secure they feel about their current financial situation, South Africa (36%), Nigeria (35%) and the UK (24%) showed the highest percentage of individuals saying they did not feel very secure.

These are alarming numbers and with political uncertainties like Brexit, established markets are also under pressure.

Over 91% of respondents in South Africa said they pay for a personal bank account and 75% said they use mobile banking.

The results also indicate that respondents in South Africa are savvier with their money than those in European markets, as the second highest percentage of respondents that said they invest in products (i.e mutual funds and stocks) that came from those in South Africa. In comparison, a high percentage of individuals from European markets; France (70%), UK (61%) and Italy (59%) said they do not usually invest with a purpose of increasing their wealth.

When respondents were asked about monthly budgeting and expenditure, only 54% of people in the UK said they set a monthly budget for personal spending, a huge comparison to the 73% that said they did in South Africa, 80% in Malaysia and 65% in Nigeria.

This indicates that those in emerging markets are more cautious with their personal finances, with 66% of respondents in emerging saying the main reason for having funds is to secure their families well-being.

Even though the financial system was established 75 years ago by some of the world’s greatest minds, it is clear that many markets are struggling with their economy and we do not utilise the technology that is now available.

Across all markets, the percentage of individuals that felt their economy in the areas they live is currently performing very well was low. The strongest answers came from South Africa (27%) and Nigeria

(23%), where they felt their economy was performing fairly poorly. Individuals from rural areas showed a higher percentage of negativity towards their economy than those in urban areas, this is largely down to the lack of access to the financial system in those areas. (23% of respondents in Nigeria and 22% of respondents in South Africa said it was very difficult for them to send money overseas.)

“We have seen little change to the global monetary system over the last 75 years, particularly amongst developed economies where financial institutions have built a system around the transfer of currencies, assets and commodities which benefit a stable and strong economy.

“As technology advances, it is important that institutions globally find a way of adopting these advancements, enabling emerging markets to have the same access to money and transfer of assets.” – Says Marcus Swanepoel

South Africa (22%) and Nigeria (23%) showed the highest percentage of positive attitude towards a single global currency making the current financial system better, whereas only 7% of respondents in the UK agreed.

The most common answer when asked what the advantages to a single global currency would be, the majority across all markets said better for the global economy; UK (20%), France (21%), Indonesia (39%), Italy (25%), Malaysia (25%), Nigeria (39%) and South Africa (35%).

The most popular answer across all markets to what the disadvantage to a global currency would be was that countries would become less independent.

As some of the world’s largest tech giants announce they are launching cryptocurrency coins, we believe developing markets will be the lead adopters. Our research shows that in these markets people are more financially savvy because they have to be, which means that they need and understand the benefits the new coins can offer.” – Marcus Swanepoel concluded.

This survey presents an overview of a study conducted by Dalia Research for Luno between 17/05/2019 and 07/06/2019 about the future of money. The sample of over 7,000 individuals with internet access was drawn in France, Indonesia, Italy, Malaysia, Nigeria, South Africa and the United Kingdom .

Calculated for a sample of this size and considering the design-effect, the average margin of error would be +/-3.1% at a confidence level of 95%.


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FG Makes u-Turn on Bank Account Re-Registration

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Federal government on Friday apologised for asking all account holders in financial institutions in the country to re-register their personal details.

FG makes u-Turn on Bank Account Re-Registration

Recall that the federal government had on Thursday ‎ordered that all persons holding accounts across financial institutions and insurance firms should complete and submit self-certification forms to their respective financial institutions.

The notice issued by the government to that effect read, ‎“This is to notify the general public that all account holders in Financial Institutions (Banks, Insurance Companies, etc.) are required to obtain, complete, and submit Self – Certification Forms to their respective Financial Institutions.

“Persons holding accounts in different financial institutions are required to complete and submit the form to each one of the institutions. The forms are required by the relevant financial institutions to carry out due diligence procedures, in line with the Income Tax Regulations 2019.‎”

The directive raised eyebrows, as account holders already possessed Bank Verification Numbers.

Following widespread condemnation that trailed the directive, the Federal Government backtracked on Friday, saying the fresh guidelin‎e was not for all Nigerians.

The government attributed the development to misinformation.

The clarification issued by the government on Friday read, ‎“We apologise for the misleading tweets (now deleted) that went up yesterday, regarding the completion of self-certification forms by Reportable Persons. The message contained in the notice does not apply to everybody. ‎FIRS will clarify Nigerians on the objectives of the directive.”

Also on Friday, FIRS, in a statement posted on Twitter, explained that the guidelines were only for non-residents, as well as people paying tax in more than one country.

Parts of the FIRS statement read, “The Self Certification Form is basically to be administered on Reportable Persons, holding accounts in Financial institutions, that are regarded as “Reportable Financial Institutions” under the CRS.

“Reportable persons are often non-residents and other persons, who have residence for tax purposes in more than one jurisdiction or country.”

“The information that indicates an account holder is a resident for tax purposes in more than one jurisdiction, is expected to be available to Financial Institutions during account opening processes, for the KYC and AML purpose.”


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Stanbic IBTC Bank Disowns Lagos ATM Fraudster

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Stanbic IBTC Bank PLC has disowned Tope Olajide, 22-year-old fraudster arraigned for theft of customers deposits.

Stanbic IBTC Bank Disowns Lagos ATM Fraudster

The Bank said this in a statement on Wednesday.

The statement said: “The attention of the management of Stanbic IBTC Bank PLC has been drawn to news currently circulating in the media, about the alleged arraignment of staff of the Bank on charges bordering on the theft of customers deposits.

“The Bank would like to clarify that the defendant, a 22-year-old Tope Olajide, IS NOT, and was at no point in time an employee of Stanbic IBTC Bank PLC.

“The alleged culprit was apprehended around 7:30 am, on Thursday, 27 August 2020, by security operatives after he was exposed by CCTV footage using ATM cards he had allegedly stolen and converted, to make withdrawals from the accounts tied to the stolen ATMs.

“The CCTV footage also showed the alleged culprit pretending to assist customers at ATMs whilst also attempting to fraudulently dispossess the customers of their ATMs.

“He was subsequently arraigned before an Ikeja Magistrate Court on Monday, 14 September, for stealing the debit cards of two customers and using them to unlawfully withdraw the sum of N427,000.

“The Bank would also like to implore members of the public to be security conscious when conducting transactions at ATMs. Customers are advised to report any suspicious actions around them to security operatives who are usually stationed around the Bank’s ATMs, when carrying out transactions at any of our ATM locations.

“As an organisation, we hold dear the values of integrity, and we will continue to prioritise the safety of our customers effectively.”


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Buhari Okays Establishment of CBN-Led Infraco

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President Muhammadu  Buhari has approved the establishment of an   Infrastructure Company (Infraco) to be driven by the Central Bank of Nigeria (CBN) in partnership with the African Finance Corporation (AFC) and the Nigerian Sovereign Investment Authority (NSIA).

Buhari Okays Establishment of CBN-Led Infraco

Mr. Godwin Emefiele, CBN governor

This is coming  on the heels of the foreign reserves’ slump to $36 billion following a cocktail of monetary policy interventions by the apex bank to cushion the scathing effects of the COVID-19 pandemic on the economy.

Mr Godwin Emefiele, CBN governor, made these disclosures in Abuja at the annual conference of the Chartered Institute of Bankers of Nigeria (CIBN) with the theme: Facilitating a Sustainable Future: The role of Banking and Finance.

According to him, Infraco would enable the use of private and public capital to support infrastructure investment that will have a multiplier effect on growth across critical sectors.

“This entity would also be able to raise funds from the capital markets and mobilise long term finance to address some of our infrastructure needs, while providing reasonable returns to investors. “We believe this well-structured fund can act as a catalyst for growth in the medium and the long run. The support of the banking community will be important in achieving this objective.

“A well-built infrastructure system, comprising hard infrastructure such as roads and ports, and soft infrastructure such as broadband penetration, can have a multiplier effect on growth by enabling the expansion of business activities in the country”, he explained.

On foreign reserves, Emefiele attributed its crash to the decline in foreign exchange earnings and subsequent adjustments in the value of the naira to the dollar.


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