You either collaborate with FinTechs or fade away soon, CBN tells Banks
The truth of the century on the future of banking was recently made clear to the Nigerian money deposit banks (MDBs), by the Central Bank of Nigeria (CBN) at the just concluded 2017 annual retreat of the Committee of E-Business Industry Heads in Abeokuta, the Ogun State capital.
Deputy Governor of Operations at the apex bank, Mr. Adebayo Adelabu told Nigerian banks to collaborate with financial technology (FinTechs) companies and not to attempt to stifle their operations out of fears of becoming irrelevant.
He cautioned banks not to nurse any form of fears working with FinTechs as only healthy collaboration will deepen the need for banking services side by side with FinTechs, saying the deal will further boost the level of financial inclusion in the country.
Speaking on the theme of the retreat, ‘Repositioning digital payments to achieve the financial inclusion goals of the financial system strategy,’ he called on CeBIH and banks to be innovative in evolving options to meet the demand of the unbanked at reasonable price to them.
According to a communiqué released by CeBIH after the retreat, the CBN deputy governor made it clear saying “As you are aware, the payments services are the channel for extending other financial services to users. The scale of transactions that we can drive through digital channels is therefore a compelling business case for you to increase investment in this segment of banking business.
“This business case, as you may have observed, is driving the interest of fintechs into your terrain and failure to be agile in responding, not necessarily by stifling the space but by collaborating with the new entrants will impact you negatively. I therefore urge you to take this challenge and respond appropriately as other financial services providers outside the banking industry are waiting on the payments system to enable the extension of their services to the un-served and underserved.”
Business Hilights recalls that during the recent seminar organized by the Nigeria information Technology Reporters’ Association (NITRA), in Lagos, founder of CWG Plc., Austin Okere hinted that the growing innovations of the FinTech companies may in future render traditional banking practice irrelevant unless banks embrace the technologies and partner with FinTechs.
He went ahead to reveal that in some climes already, the telecoms regulators are beginning to control more cash flows than the central banks.
It would be recalled that Business Hilights had reported the position of the chief executive and managing director of the most innovative and digital bank in Nigeria, Guaranty Trust Bank (GTB), Segun Agbaje when he revealed that banks no longer have all the time in the world to delay in innovative thinking and technological restructuring to remain lead in financial business since the advent of Financial technologies companies.
Addressing participants in March this year, at the Social Media Week in Lagos on the topic; ‘The Future of Banking in The Age of Social’, he said Guaranty Trust Bank is building a reputation for innovation and engagement, traits that have helped them become a favorite among young people in Nigeria, and around Africa.
Agbaje who anchored his robust presentation on the GTBank story, stemming from its beginnings as a wholesale bank through transitions into what it has become now, made it clear that “Banks have had to be innovative and proactive to keep up with technology and advancements including social media”.
Continuing, he said “In the past, banks were linear companies with their businesses restricted to providing simple financial solutions”.
“However, with the advent of mobile money and wallets, companies outside of the traditional financial circle have begun to deal with money in a way similar to banks.
He revealed further that “fintech companies and even brands like Starbucks and Uber are now in the same competitive space as banks adding that to keep up with the times, GTBank has evolved a number of initiatives to provide far-reaching solutions to its customers beyond the regular services”.
