April 19, 2021 / 03:00PM / Bukola Akinyele-Yisau for WebTV / Header Image
The Fintech Association of Nigeria recently hosted the 9th edition of its Social Meet which discussed the theme: "The Making of Indigenous Fintech Unicorns: Nuggets for Scaling". The event featured financial technology experts, regulators, innovators, fintech firms, and other key participants who discussed the value of financial technology to the economy.
President of Fintech Association of Nigeria, Mr. Adeolu Bajomo in his opening remarks provided insight into the role of fintech, and how it could be deployed to solve problems.
According to him, the fintech industry was evolving around the globe even though the 2020 COVID-19-induced lockdown stalled growth in some areas it also served as an accelerant in others. He cited the Chinese economy that grew more than 18% in a remarkable post-COVID-19 come back in Q1, 2021 resulting from the contributions of the technology sector and fintech.
He said, fintech was driving a lot of activities in Nigeria and the current ecosystem consists of over 220 members across the industry.
Bajomo highlighted the following as the three main objectives of the Fintech Association of Nigeria;
Advocacy: He pledged that the association would continue to advocate for its members to drive innovative solutions that would transform the financial market and economy. The Association according to him would support Nigeria's quest to become a leading digital economy and centre of excellence.
Acceleration: In this area, the President of the Fintech Association of Nigeria said the focus would be to accelerate processes and frameworks that would enhance the development of the fintech industry and ecosystem in the country. This would involve multi-stakeholder engagements, increased publicity, partnerships with relevant government parastatals to enable the growth of the economy.
Connect: On the objective of "Connect," Mr. Bajomo said the association had served as a strategic platform for networking and bringing together entrepreneurs, experts, regulators, and innovators to build a vibrant and robust industry.
The guest speaker, Alhaji Umaru Ibrahim, former MD of the Nigeria Deposit Insurance Corporation (NDIC), and a fintech enthusiast gave his views on the relationship between regulators and fintech services. According to him, regulators are also innovators, and to survive and regulate fintech they must be creative and innovative.
According to him the Financial Stability Board (FSB), defined fintech as technologically, enabled financial innovation that could result in new business models, and applications associated with various Financial markets and institutions.
Speaking on the relationship between banks and fintech-based services, he said banking has witnessed continuous innovative services while achieving profitability. He said digital transformation was huge and pompous and could be very confusing, and the fintech players should pay a manageable tax and encourage all other organizations to buy into it.
He said employee culture and behaviors cannot succeed without creating a climate for change, and this translated into achieving improved customer satisfaction.
He said that an EFINA, September 2020 report, noted that there were over 200 fintech companies in Nigeria that generated over $560m in the last three years. The report further stated that fintech services accounted for only 1.25% of retail banking revenues in 2019.
Speaking on Consumer protection, he said the complexity of fintech products required deep understanding by consumers and regulators. He said fintech innovation should guarantee the protection of consumer data.
He said, section 37 of Nigeria's 1999 constitution guarantees and protects Nigerians' privacy, which covers both their telephone conversations and telegraph communication.
On the side of risk management, he said fintech innovation provided enormous advantages in areas like ensuring the integrity of data.
Looking at cryptocurrencies he said currently they are not legally recognized by the Central Bank of Nigeria (CBN) and are not even insured by the NDIC. He expressed concerns over several criminal activities in the crypto assets transactions that undermine the country's progress through electronic banking fraud and Ponzi schemes.
He added that the CBN complemented by the NDIC provides necessary oversight for banks to ensure the efficiency and effectiveness of the system. the NDIC is a risk minimizer and encourages digital financial services and ensures that banks adhere to the highest risk management standard.
The Chief Executive Officer of Flutterwave Mr. Olugbenga Agboola said the ecosystem of banking across the board needs to be safe for all to be to operate. This according to him is one of the areas that flutterwave is working on and understanding the perspective of regulators when it comes to innovation.
He said Fintech in Nigeria is flourishing due to the current administration of the Central Bank, and this has witnessed a lot of allowance for fintech to be able to operate in the market.
Another perspective from him is that innovation without regulation may be disastrous if it happens, and also it is important to appreciate the value innovators are creating and to ensure that the risk is well mitigated.
The Director of Payment Systems, CBN, Mr. Musa Jimoh, said the implementation of the banking payment system has provided a robust infrastructure and opened up space for different innovations in banking operations. He emphasized the need for an enabling environment for innovation.
"The success story of innovation in banking and payment system in Nigeria include: the payment system vision 2020, the introduction of a mobile framework in 2010, electronic payment of government suppliers, and the growth of e-commerce was encouraged through the introduction of the cashless policy by the CBN," he said.
From the capital market perspective, Mr. Emomotimi Agama, Head, Registration, Exchanges Market Infrastructure, and Innovation, for the Securities Exchange Commission (SEC), said that the capital market has more to do with fintech than the payment system.
He said finance has more to do with the capital market. According to him, investor protection is paramount to SEC, and as the apex regulator of the capital market, the commission has encouraged innovation in the market.
Agama believed confidence and trust would create a wider market and opportunity for all to participate in the ecosystem.
The highlight of the event was the admission of new inductees from different organizations and professional members.