Faculty member, Lagos Business School (LBS), Dr. Olayinka David-West, stated this at the 2018 Finance Correspondents Association of Nigeria (FICAN) Annual Workshop held during the weekend in Lagos.
David-West, who was represented by Faculty Member, LBS, Prof. Olawale Ajai spoke on the theme: ‘Banks, FinTechs and Nigeria’s Financial Inclusion Journey’ said banks that fail to innovate will however lose their market share as a result of the FinTech operations.
According to internet research “Financial technology (FinTech or fintech) is the new technology and innovation that aims to compete with traditional financial methods in the delivery of financial services. FinTech is a new industry that uses technology to improve activities in finance.”
She urges bank operators to embrace innovation if they want to succeed adding that 40 per cent of adult Nigerians have bank account while 9.2 per cent used informal financial services as at 2017.
In her words, she said three per cent of the account holders used mobile money services.
Dr David-West described FinTechs as small and innovative startup companies that develop financial technology and related products.
“In practice, Financial Technology is not the exclusive domain of the FinTechs as more traditional banks, microfinance institutions and development organizations make use of financial technology. Banks and other financial services providers are important actors in scaling up FinTech solutions. Scale is important, because both financially and digitally, to include the vast amount of people and companies at the bottom of the pyramid,” she said.
She said the financial services sector has witnessed digital entrepreneurship in the form of FinTech majorly because they are highly innovative, inexpensive startup skillset, very entrepreneurial and passionate and have no defined guidelines/regulations.
The Dr pointed out that FinTechs can work with banks as facilitators to deliver financial services to the under-banked and the unbanked.
Also the faculty member, Lagos Business School said there are more Nigerians without bank accounts than those that have and it is important and a crying necessity to move more people into the financial ecosystem.
“All over the world, particularly in developing countries, technology can only go so far if you look deeply at the issue of access not translating to inclusion. Obviously, you want to increase the reach and the innovation that technology can provide, we will still have these issues.”
“FinTechs have provided useful services, not only in point of view of complementarities with the formal financial services. In terms of helping the sector delivers its traditional services more efficiently. Even in terms of innovations that allows for partnerships or greater interface between various players. They have introduced a budding platform for innovation for the banking and financial services by their disruptive effect on the industry. It is going to be a challenge to the banks not by way of being driven off of rendering banking services. They are not going to displace bankers, but they are going to displace some banks definitely,” she stated.
Also speaking, Managing Director, Proshare, Femi Awoyemi, advice bank operators to see FinTechs more as partners than threats to their operations. He said that FinTechs are supposed to provide digital financial services to the unbanked with uses of technology to make financial transactions more efficient.
Awoyemi cited example saying financial inclusion has been declining since 2014 and has widened about 20 basis points.
While, Central Bank of Nigeria (CBN) Deputy Director, Taiwo Oladimeji said the regulation for the FinTech is done by the department adding that Nigeria’s payment system remains one of the best.
He further assured the stakeholders of CBN readiness to embrace FinTech operations inline with its mandate as apex financial regulator.
The Caption Photo:Faculty member, Lagos Business School (LBS), Dr. Olayinka David-West