Technological innovations over the years have necessitated rapid growth in banking and other critical financial development sub-sectors.
As a result, efforts must be intensified at ensuring that this development facilitates financial system stability, as part of a holistic approach to economic growth and prosperity.
In consideration of this, however, judicial officers, who adjudicate over financial-related disputes, must develop the needed capacity to confront the rapid changes, in terms of new financial laws, guidelines, and others.
This was the consensus expressed by the Chief Justice of Nigeria, CJN, Justice Tanko Mohammed, Central Bank of Nigeria, CBN, Governor, Godwin Emefiele, as well as President, Chartered Institute of Bankers of Nigeria, Uche Olowu.
The trio spoke at the 19th national seminar on banking and allied matters for judges, on Tuesday in Abuja.
In his keynote address, the CBN Governor said the seminar was a veritable platform for judges, law enforcement agents, legal practitioners, financial institutions and regulators to deliberate on legal aspects of challenges faced by the banking system.
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Emefiele who was represented by the Deputy Governor, Cooperate services, Edward Adamu said the theme of the seminar, “Disruptive Innovations in the Nigeria Financial System: The Legal Considerations”, was apt, considering the rapid technological innovations and their impact on the system.
“There is no gainsaying that rapid automation and technological innovations over the past decade has impacted almost every facet of human endeavor. Technology has transformed the way we learn, communicate, deliver services, experience entertainment, etc.
“Also, continuing innovations such as robotics, artificial intelligence, and blockchain have tremendous potentials for further disruption”, Emefiele stated.
According to him: “The impact of technological innovation is even more profound in the financial system. Digital finance and the Fintech have experienced rapid growth over the past decade, disrupting conventional banking models and opening up new possibilities for designing and distributing financial services.
“The Financial Stability Board (FSB) in its report FinTech and market structure in financial services published on February 14, 2019, dimensioned the drivers of the innovations in this regard to supply and demand-side factors.
“On the supply side, technological progress spurred by the widespread availability of ICT infrastructure is a key driving factor which has opened up a whole new vista in the provision of unique access points for financial services whilst driving down the cost of delivering the services.
“Some of the innovations in this area include the use of application programming interfaces (APIs) which allow different software applications to communicate with each other and exchange data directly, without the need for human input; Mobile devices and smartphones which have become a key aspect of consumers daily lives globally with their greater functionality; cloud computing which offers advantages such as economies of scale, flexibility, operational efficiencies and cost-effectiveness, amongst others”.
On the demand side, the apex bank Chief said digitisation has spurred consumers increased demand for improved and more convenient experiences across the services that they use.
Also speaking, the CJN commended organisers of the event, saying it will help to expose Judicial Officers to the workings of the Banking sector with particular regard to Banking Law and Practice.
According to Mohammed: “It is meant to expose the Judiciary to the evolving processes of dispute resolution between banks and depositors as well as to deliberate on the measures adopted by regulators in this sphere of the economy”.
The CJN observed that the banking sector remained a present and enduring necessity to all Nigerians, even as he emphasised that legal and policy reform in the sector must continue to occupy judicial officers’ utmost participation and attention.
“It is therefore commendable that stakeholders in the Banking sector such as the Chartered Institute of Bankers of Nigeria (CIBN) recognize the role which the Judiciary plays in ensuring financial system stability as this is the fulcrum of economic growth and development. Thus, the efficiency, satisfaction, and success of the sector can be measured by the level of public confidence and assurances that deposits and investments are safe and secured.
“I must not hesitate to emphasise at this forum, the need for Judges to be circumspect while adjudicating over disputes relating to depositors’ funds as well as other banking transactions embarked upon by banks. The Judiciary, as an arbiter has an important role to play, by ensuring speedy resolution of disputes.
“As we all know, the speedy resolution of financial disputes is an economic development catalyst, as investors and other financial institutions will remain confident that their investments are safe”, the CJN said.
Mohammed noted that the principal objectives of deposit insurance systems are to contribute to the sustainability and stability of the financial system of every economy while protecting depositors by creating a safety net in the event of bank failure.
In his opening remarks, the CIBN explained that since inception, the annual seminar has proven to be an invaluable avenue for knowledge sharing, an enabler for strategic thinking and a thought leadership forum that has provided solutions to a series of legal challenges within the banking and finance industry.
While appreciating the continuous support of the CBN Governor, Olowu said: “As a matter fact, it is imperative to state that several enduring policies, regulatory and operational legacies which have fundamentally touched and reshaped our economy had been drawn from the previous resolutions arrived at in this conference and were accordingly transmitted to relevant stakeholders for adoption and implementation.
“It is therefore in the continued pursuit of this valuable legacies that the theme for this year’s seminar was generated to x-ray the Disruptive Innovations in the Nigerian Financial System: The Legal Considerations”.
