By Martin Ekpeke
Banks in Nigeria have been urged to collaborate with Financial Technology companies because of their strength to leapfrog to new forms of banking, especially in emerging markets.
Some experts gave the advice at the 3rd Quarterly Forum of the Nigeria Information Technology Reporters Association (NITRA), which had in attendance stakeholders from the Nigerian Banking, telecom and the media industry in Lagos last week.
First to hint about the importance of this collaboration is Mr. Austin Okere, Founder of CWG Plc and Entrepreneur in Residence at the Columbia Business School, New York,
According to Okere, Fintech companies in emerging markets have shown that with the right technology, it is possible to leapfrog to new forms of banking, and so collaboration for mutual benefit is paramount.
“Truth be told, Banks are best placed to continue to influence the future of Financial Services because of their huge branch network, solid reputations, and risk controls, as well as years of customer cultivation and loyalty. What is therefore needful is a collaboration between Banks and Fintechs,” Okere, who served as Chairman of the event with the theme ‘Digital Payment: Prospects and Challenges of a Financially Inclusive Nigeria’advised.
He argues that Banking is definitely going to wear a new face in much the same way that retail did with the advent of e-commerce, and so the banks should appreciate their own strength and invest in technology innovations.
However, he advised that Banks have to radically change the ‘we win when you lose’ mind-set, saying it is no longer about upstarts versus incumbents, but rather a question of how banks absorb the Fintech innovations blossoming around them to improve the value chain and enhance customer experience.
Collaborating Okere’s position is Mr. Tunde Ogungbade, Managing Director/Chief Executive Officer of Global Accelerex, a CBN certified Payment Terminal Solution Provider, who stressed that effective leverage of Fintechs can ultimately address financial inclusion and impact on numerous social groups.
The most prominent of these social groups, according to him are Low-income families, the unemployed, the elderly, those living in rural or remote areas, Immigrants, Illiterates / Low literacy level and those with disabilities or even those who distrust banks and other financial institutions or feel that they are outside the system.
Quoting World Bank, he said: “Financial inclusion means that individuals and businesses have access to useful and affordable financial products and services that meet their needs and delivered in a responsible and sustainable way”.
Ogungbade, who served as the keynote Speaker stated that with the presence of Fintechs offering Digital payments, money will more managed effectively with new ways to save, make payments, access credit, or obtain insurance.
“People will spend less time taking care of simple financial transactions and more on productive work or running a small business of their own. Digital financial services increases consumer activity and trade,” he added.