As Nigeria moves to increase the number of financially included citizens and achieve the CBN’s 80 percent financial inclusion target, experts have advised that financial service providers need to be more accessible and affordable to the grassroots level.
The experts unanimously agreed that this will require huge investments in technology and infrastructure especially as technology is now at the forefront of operations across different sectors and has facilitated positive disruptions.
This was discussed during a panel session at the 15th annual banking and finance conference in Abuja, themed ‘repositioning the financial services industry for an evolving glocal context’
Tunde Kuponiyi, managing director, Hope PSBank limited said every business has an inbuilt digital element and in a bid to improve their services, banks have increased the adoption of technology and achieved a level of automation to simplify their processes but more needs to be done.
He added that the rise of fintechs have challenged the way banks run their activities and investors have a tremendous level of trust in these companies which has helped them scale amid numerous competition and intense regulation.
“The innovation in the last few years has remodeled the traditional banking system but more needs to be done because even as they continue to survive, they must see the future and optimize it,” Kuponiyi said.
Karl Toriola, chief executive officer (CEO) MTN Nigeria said telecommunication firms are in a better position to help drive financial inclusion because they have the resources and facilities to reach an extensive number of people.
Toriola revealed that MTN as a service provider spends no less than $700 million on capital expenditure yearly to keep services running, adding that there are costs yet to be factored in as a financial service provider.
“A Telco led model can be instrumental in driving financial inclusion because there is a distribution of network and other resources available to serve the grassroot level,” he said.
Dolapo Adejuyigbe, Co-Founder, Traction Apps, said although banks and fintechs have similar goals in terms of financial inclusion and economic prosperity, banks cannot compete with fintechs due to their operational model, organizational culture, product offerings, among other things.
“Fintechs are segment focused unlike traditional banks that offer different services, also fintechs are not held back by infrastructure because all procedures are digitized and innovative,” he said.
Speaking on improving both branches of the financial sector, Adejuyigbe said Nigeria has one of the most highly regulated financial sector in Africa with guidelines that most fintechs are yet to fully understand, hence there is need to educate them on proper regulatory practice which will further help in achieving their financial inclusion goal
“The traditional banks also need to diversify and enhance their corporate governance practice in line with the revolution of the financial industry,” he said.
A Fintech and banking sector in Nigeria report by PwC Nigeria reveals that globally the financial services industry is under intense competition from fintech firms who are leveraging innovation and technology to deliver financial services to consumers and corporations.
“Corporate entities in the financial services space must begin to realign their business strategies to recognize the sweeping technological changes in the business environment,” it stated.