Why Fintech Firms, Telcos, Banks Are Fighting Fiercely In Financial Services Provision
The agility in technology that propels it not to wait for regulations and bottlenecks, must have been responsible for the sharp and persistent battle among Commercial banks, telecommunication companies, and financial technology (Fintech) firms in the financial services terrain.
The Central Bank of Nigeria (CBN) Director, Information Technology Department, Mrs. Rakiya Mohammed, made this revelation at the annual banking and technology forum organised recently by the Chartered Institute of Bankers of Nigeria (CIBN) in Lagos.
Speaking on the theme: ‘Repositioning the Financial Services Industry in an Evolving Global Context’, she said that banks were fast becoming technology companies offering financial services just as technology has become both a leveler and a catalyst for competitive advantage.
She said: “Fintechs, with the nimbleness of a cheetah, are constantly innovating to suit the needs of the next generation of bank customers.
“Fintechs are creating the buzz within the financial ecosystem in recent times.”
Besides fintech, Mrs. Mohammed said, major Telcos in the country have also secured banking licenses.
She said given the scale of their technology infrastructure, they most likely will be leveraging their data assets to drive financial inclusion into the rural areas, reaching this huge unbanked section with customised financial products.
The banking industry, she said, has been greatly impacted by the advent of modern technological innovations.
Mrs. Mohammed said the optimal electronic channels – Point of Sale, virtual cards, and internet banking – are increasingly replacing the need for physical banking.
“Full-scale virtual banking is the new normal and this was accelerated by the recent pandemic.
“While some organisations were caught off guard by the swift transition to contactless banking services during the pandemic, others who were prepared welcomed new customers into their folds and expanded their market share.
“Technology is not just the differentiator between service providers, but the orchestrator of these changes,” she stated.
Mrs. Mohammed explained that cashless channels for payment for goods and services are fast becoming the desired means for settlement, with N117.33 trillion transactions consummated in the first four months of 2022.
She said: “The ‘Baby boomer generation’ embraced plastic cards for making payments, millennials embraced e-commerce for buying and selling of goods and services, I submit that GenZ will bring us into the era of banking in the Metaverse.
“The next generation of bank customers (GenZ) are technology savvy and digital natives, unlike their predecessors.
“They want fast, mobile, borderless, and frictionless banking products and services as the basis of their experience on our platforms.
“Anything short of this is unacceptable and like you know, the GenZ do not have the patience of their parent’s generation,” she said.
Mrs. Mohammed said there is a generational shift occurring in customer demography and in the future, the GenZ will be the major recipients of banking services.
She advised banks to position their organisations in such a way as to harness this potential adequately.
“If we have learned anything in the CBN, it is the fact that technology will not wait for regulation, so we decided to be as agile as possible.”
She also explained that in the CBN, is now having conversations around monetary policy in the metaverse, open banking, and digital identities, among others.