Deepening financial inclusion, boosting fintech and imperatives

For the nation to achieve its goals of eliminating extreme poverty and boost shared prosperity through financial inclusion, there is the need to create relevant policies that would provide an enabling environment for the Financial Technology (Fintech) to thrive.

Financial experts, gathered at the just concluded Efina 2019 Financial Inclusion Conference, in Lagos, submitted that government’s action could further facilitate innovation by fostering a supportive environment, through the use of regulatory measures, for innovation to thrive.

The experts also noted that improving financial inclusion and market efficiency would bring along cyber security and reduce data protection concerns.

Therefore, they underscored the need to leverage FinTech innovation from banks to mitigate risks relating to new technologies and cyber attacks.

But just at the weekend, the Bankers Committee, at the end of its 2019 yearly retreat, in Ogere, Ogun State, resolved to strengthen individual and industry capability against cyber attacks that are rising with various use of Fintech products in the system.

The Godwin Emefiele-led bankers, however, noted that the deployment of evolving Fintech, is not just about risks to banking operations, but would facilitate financial system development with right investment and preparations ahead of fraudsters.

“Cyber risk, which today, is growing in different parts of the world, calls for the banks, the CBN, and the government, to do something about it. The banks have been advised to do more in their management and control of cyber risks.

“The banks were also advised to invest more money in tools, whether soft or hardware, that will help them in containing cyber risks in their operational environment.

“Of course, on the part of the CBN, we have all along been issuing different guidelines and frameworks on how the banks can combat cyber attack and how the industry and how the country can combat the incidence of cyberattacks, which in any case, will continue.

“But we just need to prepare so that when they strike, we would be able to withstand the shock and able to discover it early enough for the banks not to lose money or for depositors funds not to be lost,” he said.

He pointed out that the apex bank is looking at investing in security operations center, which will act as gateway, not only for banks, adding: “Unfortunately, we are all naked today as a result of Internet and cyber and we all have to do everything to protect ourselves,” he added.

He also disclosed plans to migrate phone users who are yet to be included in the financial system to a new initiative called “BVN Lite.”

According to the top banker, the existing Know-Your-Customer (KYC) scheme is part of the new BVN Lite plan, targeted at people who are currently financially excluded in “our rural communities that carry phones, but not having financial services.”

“With the collaboration of NCC, we are putting this BVN arrangement to allow them conduct minimal financial services. It should be possible for us to migrate this people into the arrangement, where they can conduct minimal financial services, not just banking services, like insurance.

“In fact, anything you want to conduct in terms of finance, like e-payment, you can do it with the aid of your phone.

“Now as you bring them into the financial system, it will help to increase our rate of financial inclusion and reduce exclusion rate,” he added.

The Chairman of Financial Services Innovators (FSI), Co-Founder of Andela, Iyin Aboyeji, said creating an enabling environment for the best ideas to thrive, in addition with right regulatory framework, would help deepen financial inclusion in Nigeria.

“Like what is obtainable in India and China, having an interface with the regulators, innovators can come into the sandbox, test ideas and everybody would be present to make input on what should be encouraged and what should be jettisoned.”

Furthermore, he pointed out that active collaboration from stakeholders is germane to deepening financial inclusion.

“There must be concerted efforts to move capital into the exercise. We must build a banking system that is digitally focused. We must also keep the customers safe and make the financial space free from fraud.”

The Chief Executive Officer of Unified Payment, Agada Apoch underscored the need to take advantage of the digital space to create sustainable wealth for all.

“Payment service banks with Fintech should focus on building new markets, bringing in those currently excluded. There is need to bring people in, people must have access to financial services at a cheaper rate, not only taking their deposits but improving their well being to make them remain included,”

The Director, Payment Systems Management Department of CBN, Samuel Okojere said efforts to deepen financial inclusion may not be achievable if then confidence of the people in the areas of financial services is eroded.

“We have to provide safety and confidence for the users. CBN is increasingly creating enabling environment by making licenses easy to enable more players.

“We need to encourage competition, innovation and high regulation. We need to focus on areas we need to tidy up in form of regulation and focus more on areas we can collaborate.”.

The General Manager, Mobile Financial Services, MTN Nigeria, Usoro Usoro, said there is need for optimal regulatory environment to make inclusion attractive.

“The role of distribution in the areas of ensuring that we have enough agents can not be over emphasized. Also right products and services as well as ensuring that we understand the need of our customers is crucial,” he said.