A few days ago, Singapore’s Central Bank used the opportunity presented by Fintech Festival attended by over 25,000 delegates, to announce a series of investment initiatives aimed at making the country the destination for global financial technology.
Some of the initiatives could be very useful for Nigeria, should the government put more seriousness in harnessing the potential in financial technology.
The initiatives – eleven in number – announced by Singapore apex bank, came less than a fortnight after the launch of a plan to create 3,000 jobs in financial services.
Part of the initiatives as reported by the Financial Times; include plans to work with banks on a ‘utility’ that will manage “know your customer” checks, which will be closely watched elsewhere in the world. Global financial institutions have constantly sought to use common systems to vet clients for money laundering and other issues. The utility, it is said, will also reduce compliance cost.
The government also hope to sign 16 cooperation agreements with other governments with the goal of facilitating information on fintech trends and issues. The agreements will enable Singaporeans send money securely to someone in any of the partnering nations with just mobile numbers.
Nigerian government officials at various forums, often allude to plans to open up the financial services sector in view of the potential of fintech. They even underscore the need to capture more unbanked Nigerians with various financial inclusion initiatives that leverage technology. However, rarely do those plans come to fruition.
The Central Bank of Nigeria, once in a while, comes up with policies to guide the financial services industry but many stakeholders are of the view that the efforts are often not sustained. For one, there is lack of cohesion between regulatory bodies and other government agencies on the way forward.
For instance, while the CBN is making efforts to secure online transactions, a lot of Nigeria are unaware of these measures because they majority are not connected online. Broadband penetration is still very low and the Nigerian government has not been able to fully implement the National Broadband Policy that the last administration passed.
There is also a near-dearth of government buy-in. There are few public investments that encourage growth in the space. Most fintech firms are forced to do things on their own.
Aminu Bakori, founder of Payant, a Kaduna-based fintech firm, told BusinessDay that when government is fully involved in fintech, it adds trust into the system most especially for the unbanked.
“In Nigeria, only 20 percent are banked and surprisingly only a few people believe in online payment services provided by fintechs.
“One major problem faced by fintechs has been around regulations, licensing and investment. Almost all funding for fintechs in Nigeria come from outside the country. If someone from another country can bet on the industry, imagine what would happen if the Nigerian government and other interested parties invests more in local fintechs,” Bakori said.
Babatunde Babs Ogundeyi, founder of Lagos-based Kudimoney also told BusinessDay that fintech provides a win for all; improved lives, potential for foreign investment, job creation and increased bottom line for the investor.
“It is a low hanging fruit that the Nigerian government needs to help harness. In Nigeria, payment companies have made it easier to set up businesses and get paid, in an upfront cash based society, lending businesses are helping people and corporate bridge the liquidity gap,” Ogundeyi said.
