Nigeria financial industry has experienced some transformation caused by disruptive technologies over the year, and in recent years, customers have become accustomed to digital experience offered by companies such as Google, Amazon and Facebook with the use of smartphones.
This is according to the welcome address by Oscar Onyema, CEO, Nigerian Stock Exchange (NSE), from NSE Market Data Workshop 2018, titled, ‘Digitisation, Disruption and Financial Inclusion,’ held last weekend in Lagos.
From his welcome address, Onyema noted that, according to research, smartphone penetration in Nigeria (that is,the percentage of adults owning a smartphone) was estimated at 28 percent, with 76 percent of internet traffic routed through mobile phone.
“In response to the exponential growth in mobile phone operation by an exploding young population, banks are adopting new technologies with customer-centric focus to make financial services more inclusive and to provide a superior customer experience in the access and use of capital.
“Despite its relatively slow adoption in Nigeria, mobile money users – according to Electronic Payment Fact Sheet provided by the Nigeria Inter-Bank Settlement System Plc (NIBSS), reportedly grew from 2.3 million in 2017 to about 8 million as at June 2018 in a space of 6 months,” Onyema said.
According to Onyema, in the capital market eco-system, digitalisation is fast gaining momentum. Purpose built solutions are being developed to reduce redundancies, cut costs and increase efficiencies for greater transparency and alpha returns.
As emerging technologies such as artificial intelligence, cloud technology and distributed ledger technology potentially disrupt the capital market infrastructure, access to market data will improve through efficiencies and transparency brought by these technologies for the advantage to non-professional investors.
The overall participation of the Nigerian capital market in the fourth industrial revolution is far less than that of our counterparts in developed and emerging economies.
“To ensure that Nigeria remains a globally competitive investment destination, we need to deepen the collaborative effort among market stakeholders to determine which emerging technologies to pursue within our markets and local context,” he said.
He noted that the exchange’s focus on innovative and disruptive solutions was also built around the market data, saying, “We are innovating with “smart channels” that can deliver on-demand data to investors including; unstructured supplementary service data (USSD), Mobile Apps, SMS and Interactive voice response (IVR).”
Strategic partnerships with data analytics firms and other actors in the FinTech ecosystem are being forged to develop solutions that will help investors around the world optimise investment decision-making. It was for this reason the NSE established the Enterprise Innovation Hub in August 2018.
Mary Uduk, acting director-general, Securities and Exchange Commission (SEC), also emphasised that the regulatory body was focused on serving as an enabler for innovation and technology that would drive financial inclusion in the country.
“SEC, along with the Central Bank of Nigeria (CBN) and other regulatory agencies, have made important contributions to the progress of financial inclusion through valuable guidance and active involvement in the National Financial Strategy (NFS) aimed at reducing adult exclusion from financial services to 20 percent by 2020. NSE is poised to contribute to and share even more insights in the collaborative quest to make the Nigerian economy a financially inclusive one,” Uduk said.
She said financial inclusion would broaden financial market and make policies more effective, saying, “When financial systems become more inclusive, they help broaden financial markets and make policies more effective.
“By bringing more sections of the population into the formal sector, the effects of market-deepening initiatives are better expanded.”
