Central Bank of Kenya and peer regulators call for proactive risk mapping of fintech innovation and third party technology concentration

The Central Bank of Kenya published a communique from the 16th Annual Board Retreat of the Joint Financial Sector Regulators Forum, setting out shared supervisory priorities for technology-driven changes in Kenya’s financial sector. The Forum welcomed innovations such as virtual assets and bundled financial products for expanding access and efficiency, but highlighted the need for closer monitoring of new financial stability, regulatory and consumer protection risks. Priorities agreed include assessing the financial stability impact of innovative products through targeted research and monitoring, and mapping concentration risk arising from reliance on third party technology service providers where a single provider supports multiple institutions. The Forum also agreed to develop a financial-sector strategy for emerging technologies including Artificial Intelligence and Machine Learning, strengthen supervisory capacity and tools for Anti-Money Laundering, Countering the Financing of Terrorism and Counter Proliferation Financing (AML/CFT/CPF), bolster consumer protection frameworks, and align crisis management and resolution frameworks to international best practice, including Emergency Liquidity Assistance for distressed financial services providers and adequate resolution funds to cover customers. FinAccess Sectoral Reports, drawing on FinAccess Surveys from 2006 to 2024, were launched and made publicly available.