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Emerging digital financial services’ll spur inclusion, ease of doing business–Report

Latest report released by the McKinsey Global Institute has revealed that Digital Financial Services (DFS); the new phase in the quest to deepen financial inclusion, payments system efficiency and transparency, would benefit billions of people across the world.

Besides, the financial technology (Fintech) as it si popularly called will also spur inclusive growth by $3.7 trillion to the Gross Domestic Product (GDP) of emerging economies within 10 years.

Experts say DFS refers to ways in which basic financial services- payments, savings, loan or insurance products are provided, particularly to the poor, through mobile phones, the Internet and/or electronic cards/payment platforms. These platforms are the outcome of innovative ideas of Fintech.

However, the Deputy Director, Financial Services at The Bill and Melinda Gates Foundation, Kosta Peric, argued that digital payment system, apart from enthroning efficiency, will reduce corruption, which is associated with cash payment.

A clear example of DFS in Nigeria is the Treasury Single Account (TSA), driven by SystemSpecs with a homegrown technology, has assisted federal government in positioning government account and detection of ‘ghost workers’.

Analysts say the volume of TSA revenue aggregation for government, currently valued at over $30 billion yearly, is not only an example of the potential of Fintech in an economy like Nigeria, but also a reason for accelerated support for existing companies and startups.

Already, the Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, said recently in Kaduna that with improved and consistent adoption of digital financial services in the country’s payment space, no less than $88 billion will be added to Nigeria’s Gross Domestic Product (GDP) by 2025.

In his submission during the recently concluded workshop, Emefiele said TSA which is an example of Fintech will bring about substantial benefits for financial services providers and the economy, apart from boosting financial inclusion level.

In an interview, Executive Director of SystemSpecs, Mr. Deremi Atanda, said the company’s participation in the Gulf Technology Exhibition (GITEX), is an eye opener to its financial technology strength, particularly as a catalyst for economic development.

He said “Tomorrow’s economy will be built on digital finance as the world looks for alternative and faster ways to achieve inclusive growth, empowering individuals, businesses and governments to carry out cheaper and more effective transactions”.

Only last week, KPMG FinTech Report noted that Nigeria, as one of the emerging economies, must leverage on the opportunities associated with digital financial services’ projection.

The report also revealed that whereas less than 50 million Nigerians have bank accounts in out of over 170 million people, 115 million of whom are youthful and use mobile phones for financial transactions.

Amongst leading drivers of Fintech in Nigeria include SystemSpecs’ Remita which is handling several governments’ financial systems including Nigerian Ports Authority (NPA).