ISPON urges banks to invest in tech startups
INSTITUTE of Software Practitioners of Nigeria (ISPON), the umbrella body for indigenous software companies in the country, has recommended that Nigerian banks should emulate their foreign counterparts by investing in technology startups.
As technology startups increasingly penetrate traditional banking segments, including payments, wealth management and billing, major global banking giants are not sitting on the sidelines. Six major American banks – Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase, Morgan Stanley, and Wells Fargo – have made strategic investments in 30 technology companies since 2009, according to CB Insights data.
ISPON in a statement signed by its President, Pius Okigbo, the institute commended Nigerians banks for their foresights in funding various tech startups in the 1990s and 2000s such as Interswitch, ValuCard (Unified Payments Limited), ATMC, NIBSS, Credit Registry and CRC Credit Bureau, all financed by various consortia of Nigerian banks.
ISPON suggested that a second wave of investments in tech startups would require the establishment of Special Purpose Vehicles [SPVs] following global precedents, as was the case with Citi Bank that incorporated Citigroup Venture Capital business through which it invested in i-Flex Solutions Limited, driving the “FLEXCUBE’ suite of products to adoption by more than 100 financial institutions in over 40 countries.