Fintech is threat to banking industry, says Nigeria’s financial regulator – CBN

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By Nwakaego Alajemba and  Chinedu James

Fintech is a threat to the nation’s banking industry, Nigeria’s financial regulator, Central Bank of Nigeria (CBN) and the Chartered Institute of Bankers of Nigeria (CIBN) have publicly asserted in Lagos at the investiture of the CIBN’s 20th President and chairman of council.

The CBN’s Governor, Mr. Godwin Emefiele, in his goodwill message at the event said, as quoted by a national daily, the Punch: “In our industry, we have a common threat. The enterprise management risk, particularly the threat posed by Fintech, is real.”

Represented by the Deputy Governor in charge of Economic Policy Directorate, Dr. Okwu Nnana, the Punch further quoted Emefiele thus: “I call on the CIBN to be at the forefront of sensitisation of the banking industry on the real threat posed by Fintech in the industry.”

Similarly, the new President of CIBN, Mr. Uche Olowu, was quoted as saying: “The banking industry is contending with multiple challenges occasioned by regulations, disruptive models and technologies as well as new competitions and of frightening dimensions is the inadequate skills set and competencies across the banks.”

Financial technology (FinTech or fintech) is the new technology and innovation that aims to compete with traditional financial methods in the delivery of financial services. Globally, fintech is gaining traction as the new frontier for financial services particularly for the unbanked and upwardly mobile individuals and institutions seeking for financial services in realtime.

Fintech is disruptive

Fintech is disruptive and is considered the nemesis of traditional ways of conducting financial transactions with a full complement of digitizing processes that eliminate paper money and human interaction.

Faced with increasing threat from the emergence of Nigeria’s digital-only banks such as Sun Trust Bank Nigeria, traditional banks like First Bank, Diamond Bank and GTBank are increasingly leveraging on disruptive technologies to improve customers’ experience of banking and make banking services a 24/7 operations with greater technology interface and lesser human interference.

Emefiele while tasking the institute on how to tame Fintech, said advocacy should be considered a good strategy on raising awareness on the threats from Fintech.

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