‘Fintechs, banks’ collaboration will secure financial sector’s future’

Tolulope Sopelola, financial expert and an associate member of the Institute of Chartered Accountants of Nigeria, has urged Deposit Money Banks (DMBs) and fintech firms in Nigeria to embrace collaboration rather than engage in unhealthy competition.

Speaking in an interview, Sopelola cited a 2022 report by Enhancing Financial Innovation & Access (EFInA), which revealed that fintech startups attracted over $1.3 billion in investments.

This significant funding, she noted, has strengthened fintech firms’ capacity to challenge traditional banks. Sopelola said, “Fintech has revolutionised financial services by offering digital payment solutions, lending platforms, and investment tools, bringing banking to millions at their fingertips. However, its rapid rise has sparked debates about whether it is a blessing or a threat to traditional banks.”

She explained that rather than being adversaries, fintech and banks should work together to enhance service delivery. Such synergy would enhance financial inclusion and improve the country’s financial services sector.

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“The relationship between fintech and banks in Nigeria is neither purely beneficial nor detrimental. Instead, it presents an evolving landscape where opportunities and challenges coexist. While fintech has disrupted traditional banking, it has also compelled banks to innovate and improve their services,” she noted.

Highlighting ways fintechs and banks can collaborate, Sopelola stressed the need for joint innovation, cost reduction, and customer acquisition strategies.

“Instead of viewing fintech firms as competitors, banks should explore partnerships that deliver innovative solutions. Both can co-develop platforms that lower transaction costs while expanding financial access. Joint marketing efforts can also boost customer acquisition for both parties,” she said.

She further suggested that fintechs and banks should raise awareness about digital financial services and their benefits and develop tailored programs to onboard unbanked populations.

“Banks should focus on markets that fintechs are less equipped to serve, such as large-scale corporate banking and complex financial solutions,” she added.

Sopelola also called on the Central Bank of Nigeria (CBN) to strengthen regulations governing both fintechs and banks to ensure a level playing field.