Thursday, November 26, 2020 / 10:12AM / Ecobank/Header Image Credit: Positive Real Estate
The Managing
Director, Ecobank Nigeria, Patrick Akinwuntan has advocated a closer
collaboration between banks, Telcos, Fintechs and industry regulators to
enhance savings and lending in the financial landscape. This development
according to him will generate activities in the economy and expand wealth creation.
Akinwuntan who was speaking at the 'Fintech in Nigeria: State of Play' event
based on the research and moderation of the Economist Intelligence Unit, stated
that the Fintech industry is currently more active in payments as against
wealth creation, which is the ultimate goal for financial inclusion. He noted
that the Central Bank of Nigeria (CBN) has been proactive in providing a
regulatory environment for the collaboration of players with emphasis on
customer protection which has improved customers' trust in using digital
channels.
Mr. Akinwuntan who
commended the role fintechs play in facilitating payment, said "there is need
to deepen their presence in lending and savings. Therefore I maintained that
collaboration between Fintech and banks is valuable. We are not at the stage of
competition yet; we are at a situation where although we have our profitability
interests, we will actually gain much more by collaborating". He added that "in
the area of savings and lending, be it to the agriculture sector, the
creative sector or the young graduates setting out to be entrepreneurs directly,
the ability to save even in little bits creates a profile that would be able to
attract lending that you can translate into economic value.
Specifically, the
Ecobank Managing Director stated that the Fintech industry rose to the
situation especially in the payment space and increasingly in lending and
savings during the Covid 19 pandemic lockdown in the country. He noted that
"between March and April, the number of transactions in the payment space for
Fintech grew in multiples of close to 800%. We saw significant participation of
the Fintech industry in actually reaching more of the underserved in the market
by reducing cost of access and making these services available all the time
ether by using traditional banks or in collaboration with government agencies."
Mr. Akinwuntan
explained that Ecobank had uninterrupted banking services for its customers
through its digital platforms and agency banking during the lockdown, "we
had invested significantly in our digital platforms; given the nature of
Ecobank as a pan African institution, the only way we could reach every
household was to leverage the digital platform. We saw a marked growth in the
number of digital based transactions as our customers continued in their way of
life depending on these platforms. And most importantly is the use of our
social media to drive advocacy with the stay safe campaign where we educated
the masses on safety guidelines. We were ready for the situation giving the
nature of our franchise. And with our agency banking push, people do not need
to go beyond their neighborhood to do transaction."
Also speaking,
Director, Payment System Management, CBN, Musa Jimoh said the apex bank's
regulation is driven by innovation. "We have come up with regulations that will
enable all the participants to behave symbiotically. Our payment system
directive will be driven by the innovation in the banks. We don't know what
will happen in the future in terms of technological development, therefore we
follow innovations and prepare a ground for all the participants to work
symbiotically. A new innovation is studied before we provide the needed
intervention in terms policy derivative that will help everybody to
participate".
He observed that
Covid 19 lockdown provided opportunity for banks to sell digital products, test
their back up and business continuity processes and explore the technological
services available and push for their financial services, noting that CBN is
backing up these areas with relevant regulations to ensure all the participants
with the payment and financial service space can actually conduct their service
responsibly.
On priorities in
the regulatory space especially those championing Fintech, Jimoh said the apex
bank currently operates both sandbox and the open bank regulation. "the sandbox
provides a regulated environment for startups who don't have the financial
strength to take an authorization from CBN to go through the entire process of
licensing to test their innovation. We are working hard to show case an environment
where startups can come to the regulatory sandbox to test their innovation and
services without having the license yet," adding that "Open banking regulation
is a principle that will allow third party to leverage on the existing bank
accounts with the banks to get information and provide services. More like
democratizing financial services where a person chooses the service provider
that will provide services and the kind of services provided. As a
Fintech, you will be able to connect to banks to provide value added services."
Fintech in Nigeria: State of Play: is an Economist
Intelligence Unit Research which examines key trends in
the fintech sector in Nigeria and assesses both industry drivers and
impediments to further growth. This report combines
extensive desk research and insights from in-depth interviews with industry
experts and executives at regulatory bodies and Fintech firms. Key findings of the report showed
that Nigerian Fintechs are moving from payments into lending, micro-investment,
wealth management, peer-to-peer transfers and insurance.
Secondly, Nigeria's regulatory environment balances innovation and
consumer protection but must continually evolve to respond to market dynamics
and lastly, Nigerian Fintech needs
to address shortcomings in the broader ecosystem to develop and flourish.
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