Fintech as a disruptor

In the last five years, banking and fund transfer/payments are the sectors most disrupted by Fintechs. This sector has witnessed an increase in the number of technology-driven payments applications and processes, mobilephone enabled digital applications that facilitate easier payments, alternative processing networks and increased use of electronic devices to transfer and save money.

Many of the platforms are also driving the financial inclusion program of the apex bank which sees to achieve an 80percent financial inclusion by 2020.

In 2017, leading payments, mobile money business platform, Paga and

the Nigerian Postal Service (NIPOST) announced a partnership aimed at making financial services available to all Nigerians by leveraging on all the NIPOST offices across the country as robust financial services points. Fintechs in the country have found a way to analyze the creditworthiness of borrowers and approve loans in minutes without physical contact. Recently, in an effort to gain more customers into the financial inclusion ‘net’, Visa, a credit card company, announced a partnership with Branch & Carbon (formerly Pay later) to introduce virtual cards which can be used on ATMS by their unbanked borrowers.

Realizing the seeming threat posed by these Fintechs, lenders in the country have also woken up from their sleep as many of them are now moving towards non-physical channels by implementing operational solutions and developing a new strategy to reach, engage and retain customers, thereby simplifying their once cumbersome processes to improve customer experience.

The partnership between traditional financial services and Fintechs will help provide a way to harness their capabilities and strengthening their competitive advantage.

Factors essential to the creation of a Successful Fintech Hub - Innovative and entrepreneurial mind-set

- Technological backbone - Regulatory support

- Adequate funding - Government programs and incentives

Opportunities associated with the rise of Fintech

- Cost efficiency

- Additional stream of revenues - Improved customer retention - Differentiation

Government initiatives that can further develop Fintech in Nigeria 1) Develop a robust digital infrastructure

2) Offer soft loans and other financial incentives to fintech start-ups

3) Designate areas that Fintech start-ups can cluster together i.e Fintech Parks

4) Organize regular seminars/ workshops for coding and entrepreneurial development

Regulatory initiatives that can further develop Fintech in Nigeria

- Establishment of a support desk that focuses only on the regulatory needs of Start-ups