CBN: FinTechs not re­plac­ing banks’ roles

Daily Trust - - NEWS - From Sun­day Michael Ogwu, La­gos

The Cen­tral Bank of Nige­ria (CBN) has as­sured that Fi­nan­cial Tech­nol­ogy (Fin­Tech) com­pa­nies will not take over the roles played by com­mer­cial banks in de­liv­er­ing ser­vices cus­tomers.

Speak­ing at the BiMonthly Fo­rum of the Fi­nan­cial Cor­re­spon­dents As­so­ci­a­tion of Nige­ria (FICAN) in La­gos at the week­end, CBN Direc­tor, Bank­ing and Pay­ments Sys­tem Depart­ment , ‘Dipo Fa­tokun said the de­mand for the ser­vices of FinTechs will con­tinue to rise, how­ever, they need com­mer­cial banks’ to en­able them op­er­ate ef­fec­tively.

Fa­tokun said the in­creas­ing roles of Fin­Tech com­pa­nies in the pay­ment sys­tem will al­low banks to fo­cus more on their tra­di­tional roles of fi­nan­cial in­ter­me­di­a­tion.

He said: “FinTechs have al­ways been in ex­is­tence, it is just that more promi­nence is be­ing given to their roles. In some ju­ris­dic­tions FinTechs are be­ing al­lowed, or plans are un­der way to al­low them con­nect to the cen­tral bank which, pre­vi­ously, was the exclusive pre­serve of the com­mer­cial banks,

“The fear has al­ways be there that FinTechs will take over the roles of the banks and that a time will come when there will be no bank. Fintechs are not li­cenced as fi­nan­cial in­sti­tu­tions, they can­not take de­posits, they can make pay­ments out of bank ac­counts. They can only fa­cil­i­tate pay­ments or make it eas­ier but the banks will still con­tinue to play a very big role”.

Fa­tokun ar­gues that Banks pro­vide hun­dreds of ser­vices out­side of pay­ments. They open Let­ters of Credit, give out loans and you can only give loans if you take de­posits. They banks pro­vide guar­an­tee, ei­ther an ad­vance pay­ment guar­an­tee or a per­for­mance bond for con­trac­tors. “For you to do that, you need to be a li­cenced fi­nan­cial in­sti­tu­tion,” he added.

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