Emerging Tech trends to watch for in Nigeria in 2021: Fintech & Remote Working
Covid-19 pandemic has changed the world & has created a new working standard for many jobs. Adoption of using internet for work & personal use has increased much faster than ever before.
SAAS companies, Online education platforms, Fintech services, Online Retail, online retail investing & digital entertainment services all saw huge increase in number of users globally in 2020.
In Nigeria, the biggest growth sector in the last few years has been financial services. In the tech industry, Fintech companies have attracted the highest share of $120.6 million FDI or foreign investments in 2020 in Nigeria’s tech sector.
We look at which digital sectors have the potential to grow in Nigeria in 2021.
The education industry in Nigeria is still in the growing phase. Traditional educational system is plagued with issues like inclusion & high dropout rates. Covid 19 intensified the situation where schools need to be closed to maintain security protocols amidst the pandemic.
Being the most prominent African market for smartphones, many companies are seeing this as an opportunity & have seized this potential for building e-learning platforms.
As students got adopted to remote education via smartphone, Nigeria based online learning apps like uLesson have started to fuel the e-learning revolution in Nigeria.
Two main factors that could fuel the growth of e-learning in Africa is the young population & how these platforms can reach even the remote villages via the internet.
E-Learning has a lot of potential but it has its challenges like infrastructure, power & internet access. Government is stepping up to help fix these problems and provide e-learning solutions to the vulnerable sections of society and enabling the skilling up of population to meet career opportunities in the digital world. When achieved, it will plug the demand-supply gap in Africa’s digital economy.
With Internet outreach & usage to gradually gain pace in future even in rural parts of Nigeria, it can create a vast market for e-learning. There will be many primary, secondary & tertiary education and opportunities for working professionals.
Initiatives like DE4A will pave the way for more social organizations to come forward & take up digital initiates for society’s vulnerable sections. This will help increase the usage of internet for access to free or cheaper online education.
Fintech is an industry that uses digital technologies to improve the operations & working of the financial industry. Between 2014-2019 alone, Nigeria’s fintech industry has attracted over $600 million from foreign investors.
Most of this investment was to payment gateways, mobile money startups, neo-banks & remittance services.
Despite having a large banking sector with $9 billion in value, service delivery still lacks inclusion & reach in rural areas. Covid 19 has created an ecosystem for Fintech to take advantage of the situation by enhancing value chain propositions in savings, loans & investments.
With competent players like Paystack, Paylater (Carbon), Remita, Kuda bank & many, traditional banks like Access, Sterling & UBA are focusing on innovating to survive the competition & it is only going to get more competitive.
Fintech companies provide services from payment gateways to personal credit through apps with minimal paperwork. Payment gateways like Flutterwave & PayStack in Nigeria have received millions in fresh funding, the latter also got acquired by global payments company Stripe in 2020 for an estimated $200+ million.
An energetic young populace, expanding smartphone entrance, & an engaged administrative drive to increment monetary consideration & credit join in making the ideal formula for a flourishing fintech sector.
Online Retail Trading & Investing
Online trading alludes to trading in the financial markets using a smartphone or internet connected device, covering share trading, mutual funds, IPO’s, portfolio management, commodities, forex etc.
As per research by South Africa’s Forex Brokers, Africa’s online retail trading volume was the highest in 2020, with more new investors signing up than in any other year before. Most of this trading was done through mobile devices.
Nigeria was the second biggest market for online trading in Africa in terms of retail trading volume in 2020 after South Africa, and this growth is expected to continue.
A recent couple of years have also seen the volume of retail trading rise fundamentally; however, it accounts for a little segment of the general trading volume. NSE have launched their mobile app called X-Mobile to enhance participation by retail investors in Nigerian capital markets.
The reason for retail trading getting into the mainstream is, the incremental rise of smartphone usage, alongside the accessibility of less expensive data plans, has made the mobile phone a famous stage for traders, particularly retail traders.
Alternatively, brokerage firms prefer their clients trading with mobile phones, which help brokers bring down their overhead expenses by keeping up fewer relationship managers.
Biggest NSE stock brokers like Stanbic IBTC Stockbroking have started offering their mobile trading apps that have features like portfolio management, order management on mobile.
Mobile trading apps of OctaFX, Binance, Luno are the top trading apps in the finance category in Android in Nigeria. Most of the popular trading apps on Google App store in Nigeria are Forex and Crypto trading related.
Nigeria had close to $25 billion in annual remittance in 2019. During the start of Covid, the total remittance to Nigeria dropped to $3373.09 million in second quarter 2020 from $5629.04 in first quarter last year.
But the remittance to Nigeria & Africa is expected to grow in coming years as the worldwide economy steadily restores from the Covid pandemic emergency.
Many online money transfer services like WorldRemit, Transferwise already offer remittance service to diaspora looking to transfer money to Nigeria.
This large size of the market will draw more competitors into Nigeria with custom remittance & money transfer services. Local payment apps & gateway like Paga, Barter (by Flutterwave) etc. have also started to offer money transfer services, and this is expected to reach even wider number of rural users.
Although the Central Bank of Nigeria is tightening up its regulatory standards for IMTOs, but this should strengthen the industry while bringing more transparency to the actual inflow into the country.
These moves aggregately are relied upon to trigger the remittance market’s development. Nigeria’s government considers this move will fuel its drive to make Nigeria a digital hub with cashless transactions & bill payments, as envisioned by DE4A’s goals. Internal migration to different states will drive rural development & domestic remittance. Thus, there will be an increment in the usage for digital remittance services in Nigeria.
Super App or application is an across the board, multi-utilitarian mobile app that consolidates a few services like communication, financial services, bill payment, food deliveries, gas connections & much more into a single platform.
Super Apps enables a consistent, incorporated, contextualized, & practical experience offered by several apps into one app, offering a platform where customers can access everything digitally.
The expression “Super Apps” is mainstream in Asia & is starting to get popular in Africa. Nigeria has become a mobile-first market in Africa, where the majority of internet users rely on smartphones for accessing the web. Hence, investors are beginning to bet on growth of Super Apps, finding a prolific turf in Africa.
Africa additionally holds extraordinary potential for super app because of some different components like; a young population with the willingness to embrace new technologies.
Super apps got wielded to the African tech psyche. As OPay’s endeavors have advocated the super app term & made it part of ordinary language; one may be pardoned for thinking about the OPay application as the super primary application in Africa.
Opay is a Chinese owned Nigeria based Fintech firm. However, Africa’s first super app has been around since before OPay. Jumia was the first super app in Africa, rebranded as Jumia pay. However, the sizable share of the market still goes to Opay. They made the need for innovations & creative outlook towards a matured market.
Cryptocurrencies & Blockchain
Nigeria is currently setting records in Bitcoin exchanging volume, trading over $566 million in the last five years & 20% growth annually. Covid-19 pandemic reaction had fueled even higher interest in Crypto trading.
In Nigeria, crypto trading attracted many millennials who are looking to speculate & invest into cryptos like Bitcoin, Ethereum etc. It is said that the crypto adoption or penetration in Nigeria is among of the highest in the world.
The Nigerian Securities & Exchange Commission has recently announced that it would create a framework, regulators for cryptocurrency, facilitating favorable administrative climate to blockchain-based digital assets. Meaning, cryptocurrencies would be perceived as items & administered by fitting protections law. The SEC would control this new resource class, without hindering innovation. Nigeria’s National Information Technology Development Agency even reported a National Blockchain Adoption Strategy Framework.
Exchanges like Binance, Luno are already mainstream in Nigeria, but we could see even more startups in crypto & blockchain industry in Nigeria in coming years.
Work from Home (WFH) Technologies
Work from home is setting down deep roots in Nigeria, & it is about time that organizations create strategies to utilize this chance.
While WFH can save significant deal costs for companies, it can help employees save money, reduce pollution, reduce commutation, & improve work-life balance. Innovation has just given us the establishment. It depends on us to grow better controls & methodologies to make a maintainable distant work culture.
The major hurdles in implementing WFH strategy is ensuring; communication, productivity, learning & security. Thankfully, there are tools available to overcome this situation.
With the adaptation of technology tracking productivity has improved in the Nigerian workspace. Worldwide Collaboration apparatuses like Slack, Zoom saw an enormous influx in their worldwide client base & income.
Companies in Nigeria could ride this global trend by creating innovative Cloud based SAAS products for remote working to help global & Nigerian businesses.