NDIC promises protection against disruptive technologies
The Nigeria Deposit Insurance Corporation (NDIC), has promised to protect banks customers from risks associated with technologies being introduced by banks to enhance transaction efficiency, which exposes customers to fraudsters during electronic dealings.
According to an Assistant Director, Research Department, NDIC, Dr. Ibrahim Alley, who spoke to journalists in Abuja, on the need to effectively regulate such innovations, said the Corporation will maintain the supervision and regulation of Fintech institutions in the country.He said: “Regulatory and supervisory activities of the Central Banks, Deposit Insurance Institutions and others) is about interest of the public, whose confidence underlay financial stability.”
Alley explained that “Fintech products as new innovations and disruptions to existing banking system are regulated by Deposit Insurance System in ways to ensures that such disruptions are internalised and risks managed to protect stability of the financial system.”
Fintech, he said, is rapidly expanding into Emerging Market and Developing Economies (EMDEs), providing the financially-underserved public with financial services and thus foster financial inclusion.He noted that “just like regular financial institutions are regulated to protect the public from risks, so are the emerging Fintech operators. The approach and severity of regulatory stance will correspond to the level of risks posed by Fintech operations to the public and financial stability.”
He said that regulating Fintechs has become necessary, because they have “revolutionised the financial industry with the new paradigm displacing the old, viewed as ‘disruption’.”He noted that technology in the past was simply evolutionary and that’s why the financial technologies (Fintechs) were not palpably disruptive.
He noted that disruptions are not necessarily negative, “especially to the progressive public and those not currently served by the traditional financial system arrangements.” He added that banks and other financial institutions have accepted the inevitability of Fintech disruptions, and “have keyed into the new order, serving customers better, and entrenching their market niche.”
Going forward, he explained that Regulatory Technology (Regtech) and Supervisory Technology (Suptech) “are emerging approaches to managing regulation and supervision of Fintech and Traditional Financial System.”
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