• Monday, May 27, 2024
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Experts advocate collaboration between banks, fintechs to drive innovation for economic growth

Experts advocate collaboration between banks, fintechs to drive innovation for economic growth

Industry leaders, innovators, and entrepreneurs gathered in Lagos recently to explore the evolving landscape of financial technology (fintech) where fintech experts including Uzoma Dozie, founder of Sparkle and former CEO of Diamond Bank advocated for collaboration between traditional banks and fintechs to drive the needed innovation and create value for Nigerians.

At the forum organised by Oradian, foremost provider of core banking software for emerging markets, Dozie said technology will play a big role in defining Nigeria’s market and therefore called for involvement of all players including banks, regulators and government to make this happen.

According to him, the future is digital and digital will be powered by fintech.

He described fintech as using technology to provide certain services, believing that digital is a mindset and “if we don’t have that mindset, we will not leverage fintech for the benefit of Nigeria.”

Retail banking and fintechs

Drawing from his experience in banking and how former Diamond Bank became the leading retail bank, Dozie said, “Diamond Bank’s retail success was based on our ability to work with fintechs to build our mobile banking capability to dive deeper in providing banking services to people at the lower end of the market and provide price point they can afford and at price point we can also generate income. If we had used the existing banking applications we would have run into loss.”

According to him, the biggest advantage of technology is that “it allows businesses to scale, and the more customers you engage on your platform, the lower the cost of serving them. The ability to understand the problem and using the appropriate technology to achieve that is important.”

He said “banking requires a lot of trust for it to grow. We are in era where we are trying to move people from cash and traditional banking ways to digital ways and this requires a lot hand holding and trust in the system by the players in the market including regulators, legislators and the government, it is a whole stakeholder approach.”

“Fintechs are very important and integral if banking will evolve and provide what it its needs for the economy. We need fintech to make banking better,we need fintech to drive banking down the bottom of the pyramid so that financial inclusion agenda can be achieved which is very important.”

He said though there are a few things government needs to do before we talk of financial inclusion which is identity, “You can’t start talking of financial inclusion if people cannot put food in their mouth. The government role is to integrate people into health and education programmes and this gives people reason to want to be identified.’’

Still work to be done

In his views, Antonio Separovic, co-founder and CEO of Oradian who looked at the fintech eco-system, said there is still work to be done to grow the sector. He said the government has to step up and not leave it to the private sector alone.

“There are things already being done in the private sector, we can see private investors and contributions by local investors and foreign investors,” he said.

“Inspite of challenges, the fintech eco-system is growing as there are more financial services in a way we did not see 10 years ago. We have 24-hour banking and customers were not limited to their branches. Absolutely there is a shift, but it does not mean we will stop at this and this will still need much work to be done,” he added.

Speaking about mitigation of fraud in financial sector, he said it is difficult to get fraud to zero point but said if something is suspicious in providing services, pause and ask questions.

“It can be mitigated by having better processes and checks and balances and sharing information with other players. Different fintechs and banks sharing information to suffocate fraud from growing is a better way to deal with it and it is about being more diligent and knowing your KYC,” he said.

The panel discussion comprised of Dozie, Babatunde Akin Moses, ceo of Sycamore.ng, Henry Obiekea, the MD of Fairmoney, and Antonio Separovic who explored the theme: Frontier Horizons – Diversifying Revenue, Mitigating Risks, and Expanding Internationally.

The discussion aimed to empower attendees with the knowledge and insights necessary to navigate disruptive times effectively.

Key discussions

Key points covered include the current state of the fintech ecosystem in Nigeria and Sub-Saharan Africa, regulatory frameworks, fostering innovation while ensuring stability, risk mitigation strategies including <a href="https://businessday.ng/news/article/cybersecurity-policy-framework-remains-insufficient-says-imf/”>cybersecurity and compliance, and revenue diversification for resilience.

Other crucial points addressed are identifying expansion opportunities outside Nigeria, market entry approaches, technological innovation leveraging blockchain and AI, building trust and adoption of fintech solutions, tailoring solutions for local needs, and sustaining growth within Nigeria by focusing on underserved segments and product innovation.

The event also fostered networking and knowledge sharing among attendees, creating an atmosphere of collaboration and empowerment.