Data transparency will boost financial inclusion for underserved Nigerians — Experts

Data transparency is a crucial element for building trust and increasing financial inclusion among underserved populations, according to stakeholders in the fintech industry.

Sarafadeen Fasasi, national president of the Association of Mobile Money and Bank Agents in Nigeria (AMMBAN), who was speaking at the recently held 2024 Regtech conference, disclosed, “Trust for the underserved population hinges on what is physical, what they can confirm, and what they can verify.”

Fasasi pointed out that although many service providers and regulators collect customer data, it often remains inaccessible when needed. He highlighted that this data needs to be utilised, especially because 107 million Nigerians have enrolled for the country’s national identity number (NIN), which is estimated to have an estimated population of 200 million.

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“For example, individuals are still asked to provide their information when seeking palliative measures. This raises the question: what is the purpose of collecting data over the years if it is not being effectively used,” he said.

According to Enhancing Financial Innovation and Access (EFINA), over 300 out of 774 local government areas in Nigeria lack bank branches. Linking Bank Verification Numbers (BVN) and NIN details is essential to a customer’s bank account, and this service is typically managed by city branches of commercial banks.

According to the A2F 2023 data, over 25 million (78 percent) of those without NIN are unbanked, and 35 million (63 percent) without BVN are unbanked. “The lack of NINs for millions jeopardises their ability to access financial services,” A2F said.

Last December, the Central Bank of Nigeria (CBN) mandated all individuals to link their accounts to a BVN or NIN. Fasasi criticised this approach, noting that it underscores Nigeria’s weak database infrastructure, as people are compelled to disrupt their schedules to comply.

During the panel discussion, Chika Nwosu, PalmPay’s chief executive officer, noted that trust issues, particularly at the last mile, stem from a lack of transparency.

“Some digital payment providers are not transparent about their fees, with many hidden charges not disclosed to customers. As a result, users often notice these discrepancies only after using the service, leading to a loss of trust in the system,” Nwosu explained.

Nwosu further stressed the importance of data privacy and security. “It is crucial to address data privacy concerns—what do you do with the data you collect from people, how do you store it, and is their data safe with you,” he said.

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Branke Mracajac, CEO of 9PSB, emphasised the need for ethical data usage, compliance with data protection laws, and using encrypted data to enhance data transparency.

“We need to embrace the ethical use of data available, ensure compliance with data protection laws, and use encrypted data, i.e., ensuring data are transmitted in an encrypted format,” Mracajac added.