Wednesday, September 23, 2020 / 06:01
PM /by EFInA / Header Image Credit: EFInA
Global FinTech growth is driven by a combination of factors -increased funding, modernized payment infrastructure, the rise of tech players and the sharing of data and technology. Threat of big techs and challenging B2C economics in developed markets are contributing to a gradual shift in FinTech models to B2B and increased collaboration between banks and FinTech.
The Nigerian FinTech landscape is attractive and growing, with a concentration in Lagos, focused on banked customers and providing payment and lending solutions. However, dynamics are changing -new pockets of growth are emerging driven by changes in consumer behavior, funding sources, and new business models; leading to an extension of Financial Services to unserved and underserved populations
Despite the increased activity in the FinTech sector in Nigeria and the positive multiplier effect, economic impact to date is low, with FinTech activity accounting for only ~1.25%1of retail banking revenues in 2019. A concerted effort by all stakeholders to address structural challenges is required to capture a greater share of Nigeria's $50bn2Digital Financial Services opportunity, and mitigate emerging risks as the sector evolves. This could help accelerate the ambition to include more individuals into the formal financial system
There are a number of actions that could enhance Nigeria's Digital Financial Services landscape -leading to a higher number of people included into the financial system. However five of them, if well executed could yield the biggest impact -Innovation enablement, Digital ID, Credit infrastructure, Digital infrastructure and Technology talent pipeline.