Regulatory hurdles facing Nigeria’s FinTech, by ACCA
A new report from the Association of Chartered Certified Accountants (ACCA), titled: “FinTech- Transforming Finance,” showed that the rapid growth of such firms in the face of traditional regulatory models could increasingly become a barrier to success.It noted that FinTech’s impact on finance and banking is proving to be as revolutionary to the sector, just as the Internet has been for other areas of the economy.
But the Head of ACCA Nigeria, Toyin Ademola, agreed that the rise of FinTech is good news for financial industry’s innovation and consumer choice.‘There are many FinTech centres around the world, but global progress is disjointed. Some jurisdictions are powering ahead, while others such as Africa are emerging and gathering pace.
“Nigeria’s technology hub, Yabacon Valley, plays a part in Africa’s thriving FinTech industry as a result of its growing investment. While the scale of transformation is hard to predict, there is no doubt that the impact of FinTech across the traditional functions of finance has been significant.
“Major banking institutions are already responding through large-scale research and investment in the face of competition from start-up challengers. This is good news for consumers and firms, as the explosion of choice in a traditionally conservative industry offers a range of new possibilities of doing business based around their bespoke needs,” she said.
She however, argued that the regulatory challenges posed by the speed of innovation places tough demands on governments and businesses.“Despite the United States benefitting from a head-start thanks to Silicon Valley’s global standing as an innovation centre, progress has been slowed through legislative and licensing hold-ups.
“This has really opened the door for other markets, such as the UK and across Asia-Pacific, where a combination of supportive regulatory framework and high digital capability is allowing the sector to flourish.
“Yet while FinTech opens a range of possibilities for business, from new banks to streamlining payments and lending, exploiting these opportunities will require adaptation from firms as well.
“We are already seeing a burgeoning Regulation Technology (RegTech) sector, which can use automation and data-analysis to provide intelligent, low-cost solutions to streamline this process.
“Understanding the intricacies of global best practices and adapting them for varying national contexts can set aspiring FinTech hubs on a course for success,” she said.According to her, it is professional accountants who will be best placed to navigate these obstacles.
“While the rise of FinTech will reduce the labour time of much contemporary finance work, the fast-evolving nature of technology adoption will also necessitate transformations in tax compliance, audit and reporting processes.
‘This will in fact place greater emphasis on the importance of having forward-thinking professional accountants equipped with a strong digital understanding and vision to guide firms through the opportunities and challenges ahead,” she added.