Pioneer Award: Bank of Namibia

The Automation Centre of Excellence has elevated the central bank’s use of suptech, enhanced monetary policy decision-making and automated government payments 

The Bank of Namibia established its Automation Centre of Excellence in 2022, revolutionising the institution’s digitisation and automation efforts across all of its operations, from data collection for monetary policy and stress-testing, to automation of the Namibian government’s payments. This included the elevation of the central bank’s digital technology stack to include artificial intelligence and machine learning capabilities, notably to create a predictive model for non-performing loans, enhanced sanctions screening and trade verification, as well as Namibia’s first-ever automated regulatory reporting system.

“By harnessing cutting-edge technology, we are transforming the landscape of traditional central banking,” Valeria Mbango, director of strategy, projects and transformation says. “Our commitment to innovation ensures that we not only meet our mandate but exceed it, paving the way for a future where technology and fiscal governance converge to empower our nation.”

The Bank of Namibia has successfully automated 28 out of 36 processes following an extensive organisational review. As a principle, it is part of the bank’s redesign methodology to ensure processes are optimised before they can be automated. This initiative is part of a broader effort to streamline 96 processes across the institution, of which 69 have been fully implemented. These automation initiatives have not only enhanced operational efficiency but also yielded significant savings – N$7 million (approximately $405,000) – and reclaimed 406 business days that would have otherwise been dedicated to manual processing.

The journey towards digital transformation wasn’t without its challenges. “Initially, our efforts faced some resistance,” recalls Olivia Haenert, the bank’s technical expert for digital transformation. “Teams were naturally cautious, uncertain about which processes should be automated, which, in turn, limited the impact we could have.” However, the landscape has since changed. As colleagues witness the tangible benefits of automation, demand has surged.

“We now receive more requests than we can accommodate,” Haenert notes. She attributes much of this progress to the visionary leadership at the helm. “We have a forward-thinking governor who consistently pushes and challenges us. It’s truly motivating for us as an organisation to keep ahead of the curve,” she adds, reflecting on the internal shift towards embracing innovation. “We have also improved our existing skills and developed new skills that are relevant for advancing our digital transformation aspirations.”

One of the standout innovations has been the bank’s automated regulatory reporting system, launched in February 2023. It is available to regulated and supervised entities licensed by the central bank to conduct banking, currency exchange and payment service provision activities. Through the system, regulated institutions can submit applications with enhanced speed and accuracy, while the central bank simultaneously tracks and monitors compliance with supervisory requirements and outstanding compliance obligations. This solution has transformed how data from regulated entities is consolidated, integrating it into a single centralised database. Among its notable efficiencies, the system has enhanced the accuracy of submitted data through built-in validation checks, and significantly reduced time spent on data processing. Analysts within the banking supervision, national payment system and exchange control departments have saved 37, 18 and 12 hours respectively thanks to these advancements – boosting both productivity and precision. The central bank aims to enhance these processes further.

The Bank of Namibia’s currency management and banking operations department fulfils the vital role of serving as the banker of the Namibian government. This responsibility encompasses the processing of payments directed to and from government accounts. The process was entirely manual, requiring officials from the finance ministry to physically visit the central bank to process local and foreign payments. The central bank has reimagined and automated the payment process. Through the development of an online portal, payments can now be uploaded seamlessly, with an automated program designed to process these transactions on the bank’s enterprise resource planning (ERP) system. This innovation has reduced processing times from 30 minutes to just two, eliminated paper dependence and introduced a robust workflow that facilitates better tracking of payments. Since its launch in May 2023, the ERP system has processed 1,116 foreign transactions, valued at N$6.2 billion, as well as 85 local high-value transactions, worth N$811 million, as part of phase two.