How CeBIH champions FINTECH in Nigeria
The increasing numbers of financial technology companies have been throwing challenges to the banking sector worldwide. These made it necessary for Deposit Money Banks in Nigeria to adopt strategy in order to sustain customer loyalty and remain profitable in the new global payment order.
At the recent retreat by the Committee of E-Banking Industry Heads (CeBIH) held in Abuja, the committee among other things, highlighted the inevitability of the emergence of Fintech companies and the challenge they posed to banks and the traditional payment methods, stressing that banks have to become equally innovative to compete with the new entrants.
The two day retreat focused on “Disruptive Technology and the Future of Payments, with emphasis on how banks and other stakeholders in the e-payment system can position themselves to take advantage of the tide of financial technological innovations.
Fintechs, according to Uwa Uzebu, Director, NonTraditional Channels West Africa, Mastercard, are one of the forces driving the exponential growth in digital payments.
He said: “In 2015, digital payments accounted for eight percent of total global retail payment of $16 trillion, adding that this is projected to grow to 24 percent in 2020 when global retail payments would have increased to $21 trillion. The number of FinTech Start-Ups has tripled and funding has grown seven times over the last decade,” he said.
According to a study by Accenture, John Obaro, Managing Director/Chief Executive, SystemSpecs, owners of Remita, said: “A total of $5.4 billion was invested in fintech companies globally in the first quarter of 2016 alone. While global investment in fintechs in 2015 stood at $22.3 billion.
“Fintech inventions have the potential of altering existing financial systems, and revising the known roles and significance of banks,” he noted.
The CeBIH chairman, Mr. Dele Deyinka said: “It is becoming evident that the key to success in this digital world is to evolve continuously in order to remain competitive and relevant to consumers.
The way in which individuals and businesses accept payment is quickly becoming the next battleground of innovation. Consumers are now surrounded by a wealth of technologies.”
In her address, Awosika however advised that banks must embrace the change represented by fintechs. “Change is here and disruption is real”, she noted, adding that, “No institution will survive without making the change to embrace digital innovations.”
She said one of the ways banks can do this is to create specialised funds to finance young minds to create innovative payment solutions.
Chief Executive Officer, Interswitch Group, Mitchell Elegbe, said while it is necessary for banks and other payment service providers to adopt disruptive technologies, it is not a sufficient condition.
He said adoption of technologies must be complemented by focusing on glamour and growth, adding that disruptions around technologies that are cool will continue to grow for years.
“You will also have to create your own monopoly, remain flexible and ready to adopt, after all you should expect to be disrupted. And beware of activity trap. Do not work so hard climbing a ladder only to discover it is resting on the wrong wall”.
According to Valetino Obi, Managing Director/ Chief Executive, E-Transact, e-payment providers should not be perturbed by the emergence of disruptive technologies but focus on how to use them to add value to their services and to the financial ecosystem.
Disruption, he noted has become the global norm adding, “There’s a major global shift in consumer behaviour. People across many diverse countries and cultures are evolving a digital lifestyle.”