One question I’ve been asking myself all week is, what does Softbank’s debut in our fintech industry with their first ever African investment mean? Equipping a fintech with a war chest of $ 400 million and a valuation of $ 2 billion is really no joke. I just wonder how the central bank of Nigeria would react because this is getting more and more interesting.
Anyway, I’d say for sure that Nigeria’s fintechs, led by Remita, VPD Money, Carbon, Flutterwave, and many others, have done pretty well if you stick to how they’ve been innovative and continue to pull more of the non-banks into the financial trawl.
Nigerian banks also deserve praise for their constant willingness to innovate, especially when it comes to serving large corporations and high net worth individuals. I would certainly rate them low in some respects, however; for example, they paid little attention to low-income earners and small business owners and their needs. Fintechs are simply changing the game here.
Fintechs have used the development of digital solutions to the satisfaction of users. The question now is: Why do financial service providers, especially the banking sector, now need digital solutions compared to conventional methods.
Since the boom in fintech startups, the development of customers has reached another level of consciousness, so that even non-banks are gradually accepting to process their financial transactions through the use of digital solutions, even if they neglect traditional means.
This has clearly shown how digital trends can bring about a noticeable transformation in the community. The influence of digital solutions on financial services has therefore helped to increase competition in the industry.
Digital solutions from fintechs have brought users a more personalized experience than ever before. This has disrupted a number of activities in the financial sector for miles, which in turn has put increased pressure on banks and the rapid development of new products and services.
Investing in digital solutions has changed not only the customer experience with financial services, but also the workplaces where these various services are provided. The digital transformation has enabled the best coordination between the teams for more collaboration, fast and efficient results and precise customer service.
It has created the ability to automate administrative tasks, a simple workflow, and the ability to simplify demanding work that would have seemed difficult with the traditional approach. It has also brought a new approach to organizational transparency. The range of digital solutions in the financial services industry may not cover much when it comes to transparency, but it has brought more transparency options to the table compared to conventional means.
As digital financial solutions have become mobile, customers expect something that guarantees them ease and convenience in business dealings over the long term. Digital transformation often involves continuous experimentation and this provides space for learning. This, in turn, leads to results that influence major changes in the financial industry.
The technology will continue to evolve and therefore requires greater adaptation to current processes. One cannot afford to get stuck with traditional means of providing financial services in the 21st century. Only the introduction of digital financial solutions will have lasting effects in this industry.
In today’s digital world, technology has presented many platforms for entrepreneurs to explore new ways, conveniences, and ways to keep their consumers happy. For every act of a digital consumer there follows a corresponding financial transaction.
The steady rise of mobile banking has also changed the way financial transactions are processed. Don’t forget that banking was one of the first financial industries to go digital. A few years ago, the banking sector needed to ensure integration of risk management using technology, and this has played a huge role in helping banks and other financial institutions cope with risk management.
The effects on risk management have helped to connect people and processes in such a collaborative way that decisions in risk management are made faster. This continues to have a positive effect on the financial sector. Continuous efforts have been made to drive modernization in the banking sector and the fintechs are the ones doing this on the front lines.
In order for the effects on the banking sector to be felt more strongly as part of the financial services industry, the central financial authority must be the source or at least work with private organizations to drive massive innovative changes for digital financial solutions. Past efforts have had an incredible effect as banking has become more accessible to millions of people. The sector must continue to revolve around technology while embracing innovation to meet the ever-changing needs of customers and build the strength of the country.
Put simply, digital finance solutions are just the newfound ways for fintech to offer multiple options to consumers.
Fintechs that offer digital financial solutions should not be viewed as enemies of the financial industry. The CBN can provide a path for mutual coexistence, taking into account their implications. This promotes economic development, innovation and healthy competition.
The CBN’s recent guidelines to contain some fintechs are simply not in the ecosystem’s best interests as investor confidence will continue to decline at a time when Ghana is attracting more FDI than its huge neighbor.
CFA is co-founder of techbuild.africa & blockbuild.africa, platforms for deepening the African tech ecosystem & godohub.org, a social enterprise that supports innovation in Africa.
All rights reserved. This material and other digital content on this website may not be reproduced, published, broadcast, rewritten or redistributed in whole or in part, in whole or in part, without the express written consent of PUNCH.
Contact: [email protected]