The global Fintech software and services sector are expected to boom as a USD 45 billion opportunities by 2020, growing at a compounded annual growth rate of 7.1 per cent, KPMG report says.
This boom is attributed to innovation and technology, which have brought about revolutionary changes in traditional financial services.
According to the report, the world has seen more than 12,000 start-ups emerge and massive global investments of USD 19 billion in 2015 in the Fin-tech space. These innovators are effectively employing technology tools to bring in seamless and innovative financial services for the banked and unbanked population in Nigeria.
Fintech, the report noted, are technology-based businesses that compete against, enable and collaborate with financial institutions. Fintech start-up firms are involved in external partnerships with government agencies, financial institutions, universities, industry consultants, research institutions, technology experts and associations.
They create a highly integrated software ecosystem that brings with it the expertise, experience, technology and facilities of all the entities together through these partnerships. The Growth and market success of any Fintech hub originates from an integrated software ecosystem.
The report also highlighted that the Nigerian economy, which is primarily cash driven has been responding well to Fintech opportunities, partly demonstrated by the steeply progressive growth in mobile money operations from an average monthly transaction value of US$5 million in 2011 to US$142.8 million in 2016.
KPMG accredits the growth in Nigerian Fintech to a surge in e-commerce, changing consumer behaviour and smartphone penetration which is currently at 23.3M smartphone users, according to Statista.
The report, however, noted that Nigeria’s growth wave is still far behind global counterparts, despite the fact that from payments services to the lending and insurance, Fintech’s are redefining the way businesses, and consumers transact.