Blockchain adoption can lower Nigeria’s economic uncertainties, tech expert says
---as First Bank sets pace in digital innovation
Around the world, there is rapid adoption of blockchain technology in growing and transforming the way businesses are being done.
Proponents say it is the technology that will revolutionize the financial services, pointing to its ability to function without a central authority and also store data in a tamper-proof way.
Given its flexibility, security and distributed nature, blockchain technology has become the base for a vast array of business applications from healthcare, real estates to finance, and a host of other industries.
Back home in Nigeria, the message appears no different, as there have been increasing discussions around how the technological application is revolutionising the way business is being done
At the heart of this drive, is one of Nigeria’s biggest lenders, First Bank, which has over its 126 years of operation, been at the forefront of driving digital innovation and financial inclusion in the country
The bank hosted the 2020 edition of its annual fintech summit, where it brought together an array of business leaders, industrial stakeholders, financial regulators and industry experts to discuss the growing adoption of blockchain technology.
The 2020 summit, which was done virtually, was the fourth in its series with the theme: “How Blockchain and Artificial Intelligence Will Disrupt FinTech in Nigeria,”.
Speaking at the virtual event, Chinedu Echeruo, an entrepreneur and technology expert said implementing the usage of blockchain technology has the potential of lowering Nigeria’s economic uncertainties.
Owing to these economic uncertainties, the country has seen its risk premium–the spread between 10-year government bonds and that in the domestic market space– widen as investors bet on a higher yield to invest in its financial assets, he said
However, adopting blockchain technology in the country would help in reducing the country’s perceived economic uncertainties by disrupting multiple industries and making economic processes more democratic, secure, transparent, and efficient.
“If blockchains are implemented in Nigeria, the economic uncertainties will be lower than the United States,” he said.
Echeruo who was the keynote speaker at the event said the global economy has entered a new age that is driven by computer and knowledge-based information; and technological applications such as blockchain, Machine learning and Artificial Intelligence are rapidly gaining prominence.
According to him, in a world where people don’t need to walk into places to enjoy their goods and services, adoption of these technologies can disrupt the Fintech space by reducing underlying risk uncertainty, increasing the speed of transactions, and minimizing the price of resources associated with the transactions.
The serial tech entrepreneur who in 2013, sold his company to Apple for $1 billion, also explained that adoption of these applications does not create opportunities for businesses but also regulators in the form of regulatory clarity, upholding global standards and in the regulatory sandbox.
For incumbents he said, AI can be used to personalize and deepen customer experiences, grow new market opportunities with lower cost and improve the culture of innovation.
“Understanding the ecosystem is the way businesses and regulators can deal with the incoming disruption that accompanies the growing adoption of technology,
“Customers are at the heart of the business strategy. The more data you have of your customers, the more you can predict patterns of human behaviour, and AI can help,” Echeruo said.
Explaining the rationale for the summit, Adesola Adeduntan, MD/CEO of First Bank said being a bank that is focused on driving financial inclusion, digital innovation is at the core of its operations as it strives to boost customer experience and promote the growth of the entire economy.
Adedutan who spoke on the bank’s gain in leveraging and investing in technology in driving good customer services noted that the Covid19 pandemic has further acted as a catalyst for accelerated innovation that the bank desires.
“For us at the bank, we have seen the pandemic as a positive opportunity, and Fintech is key in tapping from this new wave of opportunities. In our first bank digital lab we create new digital experiences, enhancing new channels and products as well as leveraging between fintech and non-fintech within the ecosystem for co-innovation,” he said.
On his part, Callistus Obetta, Group Executive, Technology and Services, First Bank, said with over 90 successful online banking transactions done every second and about 20-30 million transactions per day, the bank is on a sure path of digital transformation.
For Obetta, data is mainstream in the digital journey, and the bank is taking effective strategy on mining data beyond just the traditional opening of bank accounts to various social media platforms to understand the patterns of consumer behaviour.
“It is a journey we have embarked on, and we are playing the lead role in, working and partnering with various Fintechs to achieve, ” he said.
In response to evolving trends in technology, Musa Jimoh, director payment system management, CBN, said the apex bank has reviewed its 10-year Payment Systems Vision (PSV-2030) strategy, which will now span for five years through 2025.
Amongst other things, Jimoh explained that the bank has flagged off the regulatory sandbox that would allow it to collaborate with players in the Fintech space in promoting a safe, reliable, and efficient payment systems to foster innovation without compromising the delivery of its mandate.
The second he noted was the open banking regime, which calls for commercial bank’s open of their databases to allow Fintechs and startups, leverage the data to provide valuable services.
“We have also collapsed our entire licence schemes into four, to reduce the hurdles faced by SMEs in approaching the CBN. We will be coming up with a new one, so that small businesses with innovative ideas can approach us without stress,” Jimoh said.
Speaking on the use of technology to curb fraudulent activities, the Executive Director, Technology and Services at Nigeria Inter-Bank Settlement System (NIBSS), Aminu Maina, said Artificial Intelligence is playing a huge role in reducing fraud.
He noted that NIBSS, which has stood as an enabler and part of the regulatory arm, is leveraging various technologies to reduce fraud and uphold financial security to enable the banks to have confidence on its platforms.
“In the world, we are in, consumers are the ones showing the way telling us what they want, and for us as regulators, we must ensure we don’t get in their way,” Maina said.