Compliance as Competitive Advantage

Prof. Samuel Lartey

www.pefghana.org

Every month, millions of dollars sent home by Ghanaians abroad quietly power the local economy. These remittances pay school fees, fund health care, finance housing, and seed small businesses. For many households, they are more reliable than wages or credit. For the nation, they are a major source of foreign exchange and a stabiliser during economic stress.

But the channels that move this money have changed dramatically. What began decades ago as bank-to-bank wire transfers now flows through mobile wallets, fintech platforms, and global digital networks operating at near-real-time speeds. This evolution has expanded access and convenience, but it has also introduced new risks around fraud, money laundering, operational failures, and regulatory blind spots.

Ghana’s legal and regulatory journey has been an attempt to keep pace with this transformation. From broad anti-money laundering laws to specialised payment system rules and now dedicated International Money Transfer Operator guidelines, the framework has progressively moved from general oversight to targeted, data-driven supervision.

Understanding this evolution is essential for regulators, fintech firms, banks, investors, and consumers alike. It reveals both how far Ghana has come and what must still be done to sanitise and strengthen the IMTO sector for the future.

1. The Legal Foundations: Building Blocks of Trust and Transparency

Three pillars underpin Ghana’s current remittance oversight regime.

Law / Standard	Year	Core Objective	Relevance to Remittances
Anti Money Laundering Act (Act 1044)	2020	Prevent money laundering and terrorism financing	Requires customer due diligence, transaction monitoring, and suspicious transaction reporting
Payment Systems and Services Act (Act 987)	2019	Regulate electronic payments and fintech activities	Empowers the Bank of Ghana to license, supervise, and sanction payment service providers
FATF Recommendation 16 (Global Standard)	Ongoing international standard	Ensure full originator and beneficiary data travel with each transfer	Enables traceability of every remittance transaction end-to-end

Together, these rules aim to ensure that every cedi entering Ghana through formal channels is:

1. Traceable
2. Lawful
3. Properly settled
4. Visible to the regulator

Under these frameworks, Ghanaian banks and payment service providers must know their customers, keep detailed transaction records for at least six years, and report suspicious transactions within 24 hours. Monthly and quarterly regulatory returns provide the Bank of Ghana with ongoing visibility into flows and risks.

Technically, Ghana already had robust transparency safeguards before the new IMTO guidelines were issued.

2. The Digital Leap: Straight Through Processing and Real-Time Flows

Modern remittance systems increasingly use Straight Through Processing, in which a transfer instruction moves from the sender to the beneficiary without manual intervention.

This has three major effects:

• Reduces processing errors and manipulation
• Creates consistent, machine-readable audit trails
• Enables near real-time regulatory monitoring

When combined with FATF-compliant data requirements, every transfer contains rich information on sender, beneficiary, origin country, amount, purpose, and reference number. This data can be analysed to detect unusual patterns such as structuring, rapid circular flows, or links to sanctioned entities.

In theory, this means risks can be identified and isolated without shutting down entire networks.

 

3. The Regulatory Gap: When Jurisdiction Ends at the Border

Despite these safeguards, a structural weakness remained.

Many IMTOs that originate remittances into Ghana are headquartered and licensed abroad. Ghana’s regulator could see the money arriving through local PSPs and banks, but had limited direct authority over the foreign IMTO controlling the upstream corridor.

When serious concerns arose in a corridor, the only immediately enforceable action was often against the Ghanaian endpoint, such as suspending a local PSP or settlement bank. This protected systemic integrity but created collateral damage for compliant firms and innocent consumers using the same channels.

This gap between visibility and enforceability exposed the need for a regulatory anchor inside Ghana’s jurisdiction.

 

4. The New IMTO Guidelines: Closing the Loop

The December 2025 IMTO Guidelines create that anchor.

Any operator that wishes to send remittances into Ghana must now be registered with the Bank of Ghana and operate through approved Ghanaian agents.

Key features include:

Area	New Requirement	Intended Impact
Registration	All IMTOs must register locally	Gives BoG direct supervisory and sanctioning power
Scope of business	Only inward person-to-person remittances are allowed	Prevents unregulated banking or investment activities
Settlement	Same-day conversion to Ghana cedis using transparent reference rates	Reduces FX risk and settlement delays
Consumer protection	No extra fees at payout, mandatory electronic receipts	Improves transparency and user confidence
Compliance	Full AML and agent due diligence obligations	Extends compliance responsibility across the value chain
Reporting	Monthly data, 24-hour suspicious transaction reports, and quarterly fraud reports	Enables continuous, data-driven supervision

Banks and payment service providers can no longer act as independent IMTOs. They must operate as agents of a registered IMTO under strict service-level agreements.

This makes accountability unambiguous. If a corridor is risky, action can target the specific IMTO rather than indiscriminately disrupting multiple compliant PSPs.

5. Evolution of Ghana’s Remittance Oversight

Phase	Focus	Limitation
Early bank-based era	Basic cross-border transfers via banks	Limited access and slow processing
Fintech expansion under Act 987	Innovation and digital payments	Upstream foreign IMTOs are largely outside local jurisdiction
AML strengthening under Act 1044	Traceability and reporting	Enforcement is often indirect via local endpoints
IMTO Guidelines 2025	Direct registration and corridor accountability	Requires strong supervisory technology to avoid blunt enforcement

The trajectory shows a clear move from generic control to targeted, entity-specific oversight.

6. Remaining Gaps and Risks

Even with registration, challenges remain:

1. Spillover risk
   Poorly targeted sanctions can still disrupt compliant actors if supervisory tools are not granular enough.
2. Capacity constraints
   Real-time data analysis requires advanced supervisory technology and skilled analysts.
3. Compliance cost burden
   Smaller PSPs and agents may struggle with certification, reporting, and control requirements.
4. Cross-border coordination
   Misconduct originating abroad still requires effective international cooperation to be fully resolved.
5. Strategies to Sanitise and Strengthen the IMTO Sector
6. Precision, Risk-Based Enforcement

Use transaction-level analytics to restrict analysis to suspicious corridors, agents, or IMTOs rather than entire networks.

2. Tiered Sanctions Framework

Progress from warnings and enhanced monitoring to corridor caps before full suspension.

3. Public Compliance Register

Publish and regularly update a list of compliant and sanctioned IMTOs and agents so consumers and partners can make informed choices.

4. Supervisory Technology Integration

Embed automated monitoring tools into payment rails to flag anomalies in real time.

5. Compliance Incentives

Grant faster product approvals, sandbox access, or higher transaction limits to firms with strong compliance records.

6. Industry Collaboration Platforms

Shared utilities for KYC, fraud intelligence, and reporting can lower compliance costs and raise standards.

7. Strategies to Sanitise and Future Proof the IMTO Sector

To translate strong laws and new registration rules into real-world resilience, Ghana needs a shift from broad, reactive controls to precise, technology-enabled, and incentive-driven supervision. The following strategies close the remaining gaps while protecting compliant players and consumers.

7.1 Precision, Risk-Based Enforcement

Instead of shutting down entire payment corridors when risk is detected, supervision should target the exact source of the problem.

Using transaction-level data already required under Acts 1044 and 987 and FATF Recommendation 16, the Bank of Ghana can:

• isolate specific IMTOs, agents, or origin countries showing abnormal patterns
• impose corridor-specific restrictions rather than ecosystem-wide suspensions
• maintain uninterrupted service for compliant routes and providers

This reduces collateral damage and preserves trust in the system.

7.2 Tiered and Proportionate Sanctions

A graduated response framework discourages misconduct without destabilising the market.

Level	Example Measure	Purpose
1	Written warning and enhanced reporting	Correct minor or first time breaches
2	Transaction limits on a risky corridor	Contain emerging risk
3	Temporary suspension of a specific IMTO or agent	Stop serious or repeated violations
4	Full de registration and public notice	Remove persistently non compliant actors

This approach punishes the guilty while preserving compliant channels.

7.3 Real-Time Supervisory Technology

Sanitising the sector requires moving from periodic reviews to continuous monitoring.

Key tools include:

• automated anomaly detection on remittance flows
• live dashboards of corridor volumes and settlement positions
• instant alerts for suspicious structuring or rapid fund cycling

With Straight Through Processing already common, these tools allow near real time intervention before risks spread.

7.4 Public Compliance and Trust Register

Transparency should extend to the market.

A publicly accessible register can classify IMTOs and agents as:

• fully compliant
• under enhanced monitoring
• suspended or deregistered

Consumers, banks, PSPs, and foreign partners would quickly see who is trustworthy. Good actors gain business and reputation. Bad actors lose both.

7.5 Compliance as a Rewarded Status

Firms that invest heavily in controls should enjoy tangible advantages.

Possible incentives:

• faster approval for new products and corridors
• priority access to regulatory sandboxes and innovation hubs
• lighter routine reporting where strong automated data feeds exist
• public recognition as preferred compliant partners

Compliance then becomes commercially valuable, not just legally required.

7.6 Stronger Cross-Border Regulatory Cooperation

Many IMTO risks originate outside Ghana. Sanitisation, therefore, needs active international coordination.

Through FATF cooperation channels and bilateral arrangements, the Bank of Ghana can:

• request information and joint investigations from foreign regulators
• align sanctions so offenders cannot simply reroute through another country
• promote common data and reporting standards across corridors

This ensures that action at one end of the chain is reinforced at the other.

7.7 Shared Industry Utilities

To reduce compliance costs and raise standards simultaneously, industry wide platforms can be developed for:

• shared KYC and identity verification
• fraud and mule account blacklists
• standardised regulatory reporting interfaces

This particularly helps smaller PSPs and agents meet high standards without unsustainable expense.

7.8 Continuous Capacity Building

Rules are only as strong as the people and systems enforcing them.

Ongoing training for:

• compliance officers of IMTOs and PSPs
• supervisory and forensic teams at the Bank of Ghana
• law enforcement and financial intelligence units

will ensure that sophisticated digital risks are matched by equally sophisticated oversight.

Taken together, these measures turn regulation from a blunt instrument into a surgical tool. They eliminate weak and risky actors, protect consumers from disruption, and enable compliant firms to grow. That is how the IMTO sector in Ghana can be sanitised while remaining innovative, competitive, and trusted.

8. What This Means for Key Stakeholders

Stakeholder	What Changes	Expected Benefit
Consumers	Transparent fees, reliable payouts, and formal complaint channels	Greater trust and protection
IMTOs	Direct local accountability and stricter reporting	Clear rules and reputational differentiation for compliant players
PSPs and Banks	Act as regulated agents under SLAs	Reduced legal ambiguity and shared compliance standards
Regulator	Direct jurisdiction over inbound operators	More surgical, less disruptive enforcement
Fintech innovators	Defined regulatory pathway via registration and sandboxes	Safer room to innovate

 

9. From Burden to Advantage: Reframing Compliance

When compliance is visible, rewarded, and linked to uninterrupted market access, it becomes a competitive differentiator.

A compliant IMTO should be able to say:

• Our corridor stays open when risky ones are restricted
• Our approvals come faster because our controls are strong
• Our brand signals safety to consumers and partners

That turns AML systems, reporting discipline, and consumer protection from cost centres into market assets.

Conclusion

Ghana’s remittance regulations have evolved from broad anti-crime controls to a more targeted framework focused on accountability, transparency, and consumer protection. Acts 1044 and 987, supported by global FATF standards and modern straight-through processing, built the foundation of traceability and data visibility. The new IMTO Guidelines close the jurisdictional gap by bringing cross-border operators directly under Ghana’s supervisory reach.

Registration is therefore not a cosmetic add-on but a structural completion of the regulatory loop. Yet its success depends on how intelligently it is used. Heavy-handed, blanket enforcement would recreate the very collateral damage the reform seeks to avoid. Precision, technology-driven, risk-based supervision will instead allow the regulator to hit the guilty without destabilising the compliant.

If Ghana couples its strong legal framework with real-time digital oversight, transparent compliance signalling, and incentives for good behaviour, the IMTO sector can be fully sanitised without stifling innovation. In that future, compliance is not a brake on fintech growth. It is the engine of trust that enables the ecosystem to expand safely, attract investment, and serve millions of Ghanaians who depend on remittances.

Compliance, properly enforced and visibly rewarded, becomes Ghana’s competitive advantage.

 

The post Compliance as Competitive Advantage appeared first on The Business & Financial Times.

Read Full Story