FinTech | Regulations pose hurdle to Nigeria’s gateway ambition, industry players told

FinTech | Regulations pose hurdle to Nigeria’s gateway ambition, industry players told

FinTech | Regulations pose hurdle to Nigeria’s gateway ambition, industry players told

0

Government regulation may stand in the way of making Nigeria become Africa’s FinTech gateway, a group of influential players in the fast-growing sector have been told.

Mr Deremi Atanda, Executive Director at SystemSpec says that despite the upsurge in the entry of companies into the FinTech sector, players must adopt a coordinated approach towards addressing regulatory challenges faced in Nigeria.

The SystemSpec Director, who was speaking at the FinTech 1000 forum hosted by the Nigeria Internet Registration Association (NIRA) in Lagos wants players in the FinTech sector to collaborate more to make the country the continent’s FinTech gateway.

This issue came under spotlight at FinTech 1000+, an event that offered the unique opportunity for the country’s leading FinTech players to network with the industry brightest light, discover cutting edge insight into the latest trend and share invaluable experience with peers.

In particular, it is observed that the regulators focus on preventing the systemic risk associated with “too-big-to-fail” institutions, while overlooking the conceptually distinct systemic risks associated with small, decentralized FinTech ecosystems.

Technology Times photo shows panelists at the FinTech 1000+ event that offered the unique opportunity for the country's leading FinTech players to network with the industry brightest light, discover cutting edge insight into the latest trend and share invaluable experience with peers.
Technology Times photo shows panelists at the FinTech 1000+ event that offered the unique opportunity for the country’s leading FinTech players to network with the industry brightest light, discover cutting edge insight into the latest trend and share invaluable experience with peers.

One of the “tragedy” that the Nigeria has suffered as a nation is the abolition of “Technology” from the portfolio of the Minister of Communication, Atanda tells attendees at the FinTech 1000 event.

”For the first four years when the Ministry of Communication was created, we had the Minister of Communication Technology, the industry itself did something differently to pursue this agenda of becoming Africa’s FinTech gateway”, Atanda says while speaking on some of the stumbling block of making Nigeria the African FinTech gateway.

“There must be some government policies we need to contend with by taking them away from the regular national policies because we are speaking in such a narrow term as FinTech that is so strange to many people despite the huge potential of changing our national narrative”, he adds.

Atanda wants his peers in the FinTech sector to take a cue from the Lagos State Government that has for the first time in 30 years reviewed its education policy and ”something interesting happened because they said to themselves that Lagos cannot continue to subsume itself under the national educational policies because it seem Nigeria as a country and Lagos as a mega city are on different frequency to move at different speed.”

Technology Times photo shows attendees at the FinTech 1000+ event that offered the unique opportunity for the country's leading FinTech players to network with the industry brightest light, discover cutting edge insight into the latest trend and share invaluable experience with peers.
Technology Times photo shows attendees at the FinTech 1000+ event that offered the unique opportunity for the country’s leading FinTech players to network with the industry brightest light, discover cutting edge insight into the latest trend and share invaluable experience with peers.

Atanda says that by the review of its Education policy, “Lagos as a mega city is taking its fate in its hand. Lagos has also realized that it cannot achieved that by just being the government behind it. So what Lagos state government has done is to partner with private sector.”

Atanda says that by the review of its Education policy, “Lagos as a mega city is taking its fate in its hand. Lagos has also realized that it cannot achieved that by just being the government behind it. So what Lagos state government has done is to partner with private sector.”

The SystemSpec Director further explains that ”since 2007, there has been a Payment System Vision and most of us in this room as FinTech players are probably not aware and because this things are just existing, nothing ever comes out of it. If  we must be able carve this vision, we must be able to stand behind it to navigate the wilderness of those contending policies. If that doesn’t happen, it probably will go nowhere.”

According to him, “telling the story of how much Nigeria becoming Africa’s FinTech gateway can benefit the country. Before you know it, that narrative can become another political correctness rather than delivering the actual benefit that it is supposed to deliver.”

For Atanda, “another thing is the educational base we currently have. Do we have the right education imperative that is aligned with what we want to be as a nation and what it takes to review educational policies and be able to implement them?”

According to the event communique, panelist at the FinTech 1000 event says that the existing financial regulation in Nigeria is yet to fully take into account the speedy and dynamic rise of FinTech and the fundamental changes it has presented across many fronts: including the way banking works, the way capital is raised, the very form of money, the introduction of advanced technology, among others.

According to them, these changes call for a wide-ranging re-conceptualization of financial regulation in an era of technology-enabled finance.

 Technology Times photo shows some panelists at the FinTech 1000+ event that offered the unique opportunity for the country's leading FinTech players to network with the industry brightest light, discover cutting edge insight into the latest trend and share invaluable experience with peers.

Technology Times photo shows some panelists at the FinTech 1000+ event that offered the unique opportunity for the country’s leading FinTech players to network with the industry brightest light, discover cutting edge insight into the latest trend and share invaluable experience with peers.

In particular, it is observed that the regulators focus on preventing the systemic risk associated with “too-big-to-fail” institutions, while overlooking the conceptually distinct systemic risks associated with small, decentralized FinTech ecosystems.

Also firms that play in the FinTech sector must realize the importance of telling their success stories and projecting their significant milestones and choose to commit resources to this as an active part of operating their businesses.

It was also observed that the Nigeria’s FinTech industry is currently PayTech-focused. LendTech is gradually emerging with smart innovations. There is therefore urgent need to encourage players to plug into other branches of FinTech and begin to innovate around RegTech, WealthTech and InsurTech, among others.

”There is a current dearth of FinTech talent and domain experts in Nigeria required to achieve the intended objective of becoming Africa’s FinTech Gateway”, according to the event communique.

On the issue of funding the panelists observed that between 2015 and 2017, African FinTech startups including Nigeria-based organisations jointly attracted more than $100 million in funding most of which was was sourced offshore. The implication is that Nigeria is not yet the net gainer of the industry.

FinTech 1000+ must develop strategies to present inherent opportunities and mobilise local investors to invest in FinTech, according to the forum.

The forum also wants the so-called “FinCumbents” to be encouraged to make the acquisition of innovative FinTech startups an integral part of their growth strategies.

 

No tags for this post.

Related posts

Kolade Akinola Technology Journalist at Technology Times Mobile: + 234 (0) 807 401 6027

We want to hear from you...