Fintech Associates Limited is building a network across some universities in Nigeria, to host the University Based Incubation and Acceleration programmes, to aid in the youths capacity building to develop positive, independent thought-process in order to stimulate future graduates towards innovation and entrepreneurial venture creation with a focus on FINTECH/INSURTECH/EDUTECH/MEDITECH solutions.
During the 2018 Central Bank of Nigeria FITC continuous Education Programme for Directors of Banks and other Financial Institutions held at Eko Hotel on 18th September 2018, Dr Segun Aina-Chairman, Fintech Associates Limited, commended some of the financial services regulators in Nigeria especially the Securities and Exchange Commission and Central Bank of Nigeria for making conscious efforts to promote Innovation in financial services and encouraged them to take active part in the global financial innovation network initiative towards benefiting from cross border solution, information exchange and wider market access for Nigerian innovative products.
COMMUNIQUE ON THE 1ST NATIONAL FINTECH CONFERENCE IN NIGERIA
HELD AT LAGOS ORIENTAL HOTEL ON 24TH APRIL, 2017
The First Financial Technology (FinTech) Conference was held on 24th of April, 2017 at the Lagos Oriental Hotel in collaboration with Digital Finance Institute (DFI) of Canada and Chartered Institute of Bankers of Nigeria Centre for Financial Studies (CIBNCFS).
The conference program was anchored by Mr. Boason Omofaye of Channels TV.
Financial Technology aims at solving every financial problem on the street i.e bills payment via the use of technology.
First International FinTech conference was held on 12th April in London, where the technology was perused and identified as a tangible tool for economic development. It was therefore applauded that Nigeria is holding the maiden national edition of the same conference same month in Lagos. Hence, Nigeria as a country should not underrate itself in this technology advancement. FinTech encourages easy transfer, mobile payments and financial transactions, it is expected that this will improve businesses, attract investors, attract digital economy and advance nations economic development.
The conference had participants from all major sectors of the economy and outside the country which includes over twenty countries. The sectors include Banking, Finance, Insurance, Manufacturing, Capital Market, Media, Research institutes and ICT, amongst others. Across the world, we have speakers from far East, Asia, Europe, West Africa and Canada.
Welcome addresses were made by Dr. Segun Aina, CON, FCIB, Chairman FinTech Associates Limited and Christine Duhaime, Founder and Executive Director Digital Finance Institute. A goodwill message was given by the President and Chairman of Council of the Chartered Institute of Bankers Nigeria, Professor Segun Ajibola, Ph.D, FCIB while opening remarks and the keynote opening address were given by Mr. Ade Ayeyemi, Group CEO, Ecobank Nigeria and Dr. Okey Enelmah, Minister of Industry, Trade and Investment respectively
During the keynote address, Dr. Okey Enelamah explained the benefits of FinTech by giving the example of the Government Enterprise and Empowerment Programme which was executed by the Ministry of Industry, Trade and Investment through the Bank of Industry. The programme, offers soft loans to market women, farmers and artisans. The cost of dispersing soft loans through this platform is much cheaper and more efficient than through more traditional means of granting loans. To date over thirty thousand (30,000) beneficiaries have received soft loans through this programme.
Panel Discussions and Interactions
There were a total of Six major plenary sessions with each having different panels of at least four speakers. Other three sessions include CEOs Round Table talk, Start-Up Pitch Challenge for budding FinTechpreneurs and luncheon talk on how Disruptive Technology is shaping the future of payments in Nigeria.
- Financial Services and Blockchain
In this panel, blockchain was described as a database for managing financial transactions. A digital ledger of all Bitcoin transactions, it keeps records of all online transactions. It also secures online transactions. The Bitcoin is not managed by any bank. In this technology the money used for transaction is not linked to any telecommunication firm, neither is it in any particular country’s currency, it is digital currency with open source. Block chain makes funds transfer across countries easy without the payer having the destination country’s currency.
Also in this panel financial services being offered in Nigeria presently were reviewed with various questions raised.
- Financial Inclusion
Financial Inclusion is the activity to include rural dwellers in services offered by financial institutions, especially in locations where there are fewer banks but telecommunication network coverage. Attention was equally pointed to the fact that financial inclusion is not only about services but how the services are delivered.
FinTech companies have a lot of opportunities in creating products, which gives bigger opportunities for financial inclusion, and with financial inclusion there are yet bigger opportunities for the country’s economic growth. Countries that are ahead of Nigeria in Financial inclusion rely largely on mobile devices.
Ecobank was described as a vanguard of FinTech using Quick Response (QR) code. With the QR code payments are made anywhere any time once the payer has a camera phone. The QR code was seen as a major means of financially including Nigeria into FinTech services.
- A lesson from Kenya financial inclusion depicts that so many innovations, service providers from various level, even services at lower level in various sectors health, education are getting included in FinTech giving room for high inclusion rate.
- Extending the Financial Inclusion Coverage was said to be visible by proliferation of the agents’ networks such as NIPOST or access points. The rural dwellers must have access points that take them close to the practitioners.
- Nigeria as Africa’s FinTech Leader
This panel established that Nigeria is not yet a FinTech leader but definitely will be someday. To get Nigeria to become a FinTech leader the following were suggested;
- A key government official to Lagos State government, articulated that the government is and should always be open and ready to partner with anybody or organisation ready to make FinTech work and extend its inclusion.
- It was stated that activities to promote FinTech includes encouraging youth entrepreneurship.
- Services offered by FinTech include payments, lending, insurance and so on. The focus in Nigeria as of now tends to be on payment solutions, whereas there are other services that can be focused on. Focus on this other services will move Nigeria further in the journey
- There should not be any threats amongst financial institutions, as the sky is big enough for everyone. FinTech institutions and banks are not to give room for competition but collaboration.
- Also it was stressed that delivery of service is another thing to consider. The services rendered should be instant and in real time.
- Attention needs to be paid to cyber security in order to be a global leader.
- Lessons in FinTech
This panel looked at issues of financial institutions that need to be addressed such as poor network, unavailability of banks in rural areas, availability of ATM services 24/7, and what lesson to be learnt on expanding the FinTech coverage and acceptability.
Kobo track is a financial management solution, which people are willing to embrace but for some bottle neck challenges its facing.
There is need to improve people on their skills especially fresh graduates. To do it right, young minds need to be encouraged and trained. Contextual banking should be encouraged too, whereby banks make budget on behalf of customers and advice on transactions to get involved with.
Government need to encourage entrepreneurs, entrepreneurs too should not be discouraged. Proceeds from this may not be immediate but it will surely be
Other lessons to be learnt include:
- Access to capital does not guarantee success even to payment solutions. Focus should be on the problem the payment solution is solving.
- Fintech should avoid having a situation where both customers and sellers are on a single platform.
- Money management is better considered by banks than just transactions
- FinTech providers must collaborate as customers will not need more than just one FinTech service provider.
Financial literacy is not really the challenge but how to operate the various Apps. So FinTech organizations should make the app easy to learn and use.
- RegTech in Nigeria
Attention was pointed to the fact that technology firms came up with FinTech when Nigeria suffered financial challenge in 2008. Thinking of the technology to improve financial services means the need for regulation to regulate activities of the service providers.
Economic identity needs to be created for people to enable FinTech thrive. RegTech is a subset of FinTech, that is, the need to regulate technologies, monitor and coordinate FinTech operations.
In a Narrow view: RegTech is using technology to facilitate the supervision of companies
While in Broad view: RegTech is using technology to operate and facilitate the supervision of services in companies.
RegTech are part of the things FinTech companies will have to cope with.
Innovators are to work closely with regulators so as to work hand in hand in designing a product for easy approval of products. To borrow a leaf from UK’s innovations sound box, three possible scenarios:
- FinTech will collaborate with RegTech
- If products affects value change e.g. intermediary. This will be disruptive to an extent.
- Total disruption in the system. FinTech will come and send some insurance companies out completely.
- Promoting innovation, collaborations and not competition
- Issues of capital, have huge capital
- Enforcement of compulsory insurance
- The future of AI and Machine Learning in Finance
Artificial Intelligence are Models or Apps that try to mimic human beings physically or non-physically like Robots, Apps, etc. Ability to see virtual perception.
Part of AI natural language processing helped Kudi, a financial solution provider in Nigeria, to build on a messaging platform. You chat with a computer to get you something and does it; like paying bills.
There will be that period in future that machines will take over human position. Finance started with man relating to man, the relationship grew to man to machine. Now we are approaching the era of machine relating with machine.
The place of human is being taken over by machine. It becomes challenging in future when men will no longer relate with men as such.
Security in future becomes more challenging as the technology is taken over. There will be need to secure the system so that the purpose of the system will not be defeated. AI is not expected to take over human reasoning it is just to make activities of human better.
Tech CEO Roundtable
LifeBank: helps with hospital bills. It is a financial service in the health sector. It helps people save for future health care needs
PiggyBank: simple and effective way of saving for a large project or future needs, task or bill to settle
Start-up Pitch Challenge
Six presentations were made by budding FinTechpreneurs to the delight of the audience and questions were thrown at them. Below are summary of the presentations.
Social Lender: uses digital finger prints as social reputation. A platform where loans can be given, with a social guarantor (a friend) as a security.
Good wealth: money management for SMEs, works with SMEDAN. It is a means of funding small and medium scale entrepreneurs.
Loyalty Hub: An app to help people invest in SME in their local community. Focus is on SME startups
Ikore – Kecepts Solution: Solves the problem of financial literacy and teach how to invest. Helps to learn financial skill acquisition amongst African youth.
Dutcheight: target is to recovering lost revenue and bring back to the companies
FriendsVow: System of line of credit, gives people access to credit by making vows (promises), and keep to it. This is online Esusu.
The winner of this startup session was Oluseyi Akinkugbe service provider of Good Wealth.
- Disruptive Technology is shaping the future of payments in Nigeria. Phones have now taken over so many items or tools made use of in time past such as the alarms, calculators, diaries, torchlight, typewriters, calendars, and so on. Also, this has crept into finance; payments are now being made with the mobile devices. Thanks to the smart technology.
There are so many Apps for financial development, daily banking, and too many financial Apps which can’t sustain the future of finance management. Interoperability within the industry is another solution to having too many App solving similar problems. With QR codes, collaborations and payments are made easy.
- The Sessions were well-attended with delegates from both the public and private sectors of the economy. The faculty displayed excellent mastery of the subject matter and participants’ contributions to the discussion were insightful.
- Dr. Segun Aina, CON, FCIB and Christine Duhaime, Founder, DFI during their closing remarks made the following announcements:
- The next National FinTech Conference would hold from 24 – 26 January, 2018.
- Apart from the main conference, the Conference would hold sector specific events.
A team is being put together by Fintech Associates Limited to create the Fintech Association of Nigeria. The team includes leading FinTech companies in Nigeria to midwife it. The Session was well-attended with delegates from both the public and private sectors of the economy. The faculty displayed excellent mastery of the subject matter and participants’ contributions to the discussion were insightful. Dr Aina, CON, FCIB and Mrs. Christine Duhaime, Founder, Digital Finance Institute during their closing remarks made the following announcements:
- The next National FinTech Conference would hold from 25-26 January, 2018.
- Apart from the main conference, the Conference would hold sector specific events.
- A team has been put together to create the Fintech Association of Nigeria. The team includes, Fintech Associates Limited, Proshare, Ecobank, Mastercard, SystemSpecs, University of Lagos and Nigeria Inter-Bank Settlement System Plc (NIBBS).
Questions and Answers Summary
Q – Where do we see banking sector in year 2025?
R – FinTech partnering with Banks will help to improve financial services offered by the banks.
FinTech can also come up with new products that will make businesses thrive for banks. It should not be seen as FinTech is coming to drive home banks rather make banks more conspicuous.
Also, banks are seen operating on top of Block chain, a better customer services, this will allow decentralised banking operations. It encourages nationwide banking. Banks partnering with Block chain does not mean competition with each other rather it makes life easier for banks as banks need not build the technology themselves. The challenge will be who owns the big pie. Looking away from this challenge, here are some of the other benefits this partnering may offer; reduction in branch network of banks, banks become capital intensive and not labourer intensive, and there will be more opportunities for companies to take over some services.
Q – Has block chain not been over boarded somewhere?
R – Block chain is being monitored and tracked to avoid fraud. It is thus advisable not to engage in too many block chains at once.
Q – What is the effect of block chain on loan, value of currency?
R – FinTech and Block chain improves value of currency because this reduces the amount spent on currency printing. Block chain has easy access to banking services.
Q – How will banks trade with virtual currencies without conflicts?
R – Government of CBN should look in depth with Bit coin and other Block chain. It is said that trading with Block chain is not illegal, but the counsel is life savings should not be put into virtual currencies.
Q – Cards as instruments in engendering Financial Inclusion, what can be done in getting people to pick cards?
R – Cards are not necessary in the future, what matter is payment happening in cashless manner, that is technology driven.
Including rural areas is multifaceted, it starts from product design; products must have immediacy of cash, which improves payment trust. People embrace any product that is seen to have perceived value. Partnership is another important means to include rural areas, synergizing will bring more progress. Government especially needs to be involved. Spending money needs to be made easy.
Right to Financial inclusion: as right to life is fundamental, right to transaction and business should be essential as well.
Challenges with opening account in banks includes having to fill up to 15 pages documents, get certificate, get NEPA bills and some other documents can be tiring, but instance account opening makes life easy. Introducing phone numbers as bank account number makes transaction and banking transaction easy. Digital opening of account is now easy and can be made on phones.
Q – Absence of banks in some localities
R – Financial inclusion building is a journey; collaboration is the answer to the questions. The Nigeria Postal Service (NIPOST) was said to have come up with a new aim of reducing poverty and taking services to rural areas. NIPOST is now tending towards becoming a financial institution. NIPOST emergence as a financial institution or access point can solve the problem of absence of banks in some communities. Solutions can be proffered to network issues via collaborations from telecommunication institutions. Nigerians are said to be money literate.
Q – Like in other developed countries, what needs to be done to ensure the growth of FinTech in Nigeria?
R – Growing FinTech has to start from top down, this requires a lot of investment in terms of manpower, resources and government funding. There is need for more active collaboration between Ministry of Science and Technology and Central Bank; joint collaboration amongst ICT, CBN and Government.
Government needs to create appropriate framework and release enough funds in order to get to the leading position in Africa. Government has large role to play in innovation and FinTech.
Banks needs to equally grow and develop into embracing the services of FinTech.
Q- How does CBN ensure the right technology to regulate the FinTech innovations?
R – CBN has taken the position of facilitator. There is an opportunity for FinTech to grow in RegTech that is regulations are to be set before the innovations.
Proportionate regulation for FinTech
- A FinTech that is promoting a service must adequately scope what is expected of the FinTech
- Banking Tech, FinTech and Financial services are futuristic. There is need to get the regulations and the loads of regulatory technologies can be reduced on FinTech if they are together.
- Security: the FinTech app should considerably be secured.
Registration and Licensing:
- Law is clear on registration for any For a FinTech company, there is need to register and get a license from CBN.
- Taxation is another thing that has to be considered as tax monitors are not able to get accurate tax rate for FinTech providers.
Issues to look at:
- Is personal information safe?
- Are protection in place, how can we avoid spam, intrusions, etc?
Data protection: privacy of citizens are expected to be protected. Consumer code of practice be effective.
Virtual currencies: there should be policy on pair to pair in platform.