‘Rising cybersecurity threats impacting Nigeria’s financial inclusion drive’

Folasade Femi-Lawal is the Country Manager and Area Business Head, West Africa at Mastercard. In this interview with ADEYEMI ADEPETUN, she says AI will be critical in decentralising and fortifying the digital banking space. Among other germane issues, including rise in cyber threats, she stressed that Nigeria needs more investments to expand services and subsequently deepen financial inclusion.

The global payment ecosystem is fast evolving with innovation. Are these innovations happening in Nigeria and the rest of Africa too?
Innovations are rapidly being embraced by Africa, thanks to increased digital transformation and a growing emphasis on security and convenience in the region. I believe the continent stands to gain the most from this new era to address its diverse needs and unique challenges – fostering inclusive growth, empowering local SMEs, and unlocking new opportunities for economic development.
   
Open banking, especially, is poised to revolutionise financial services across the continent and I am thrilled to be part of the Open Banking Committee set up by the Central Bank of Nigeria to guide its implementation in the country. The government recognises its transformative power and potential to foster financial inclusion, drive innovation, and enhance competition and collaboration among banks, fintech companies, and other stakeholders.
   
Recognising this, we recently initiated collaboration with Mono Technologies Nigeria Limited to introduce account-to-account (A2A) payments and a suite of other open banking products, powered by Mastercard Gateway. This solution will provide businesses in the region with a secure and streamlined A2A payment solution, addressing evolving consumer needs and enhancing the overall payment experience.
   
Other innovations set to make a massive impact in the country include contactless solutions and cross-border payment solutions. We are leading the charge in driving their adoption and addressing longstanding needs through strategic partnerships.  

To what extent is AI playing or going to play a role in the payment ecosystem globally?
AI has been earmarked as one of the major drivers of the Fourth Industrial Revolution, so it is not surprising to see it permeating every industry. Its impact on the world has been far-reaching in ways we could not have imagined. It has certainly reshaped the global payment ecosystem, with significant implications for the future of banking and commerce. 
     
Many financial institutions are starting to integrate AI solutions throughout their strategy and operations, and we are beginning to see numerous use cases or functions. AI is transforming commerce by enabling more personalization and specialized solutions that help us oversee complex, multi-party payments. AI is improving security by making transactions safer and easier for customers and businesses through personalization. Finally, AI is fortifying trust in digital banking and eCommerce by leveraging your data to spot potential breaches. 
  
Mastercard remains curious about AI. We are at the forefront of steering its impact on the payment industry by initiating partnerships and leveraging our capabilities to create innovative AI-led solutions that enhance both the consumer-facing and operational sides of the payment industry.  

Can you shed light on Nigeria’s ePayment space viz-a-viz challenges and opportunities?
In the last two years, several African countries have experienced remarkable growth in e-payments. Notably, e-payment transactions in Nigeria rose to N600 trillion in 2023, hitting an all-time high as more Nigerians embrace cashless payments. 
    
As I mentioned earlier, the rapid growth of digital payments in Nigeria reflects a profound shift in how people want to manage their finances and conduct transactions, with convenience, accessibility, and cost-effectiveness as key considerations. Although some challenges remain in adopting e-payments, the opportunity is significant, as wider adoption means wider financial inclusion, and therefore inclusive growth of the digital economy.
   
As the payment industry embraces digital advancements, cybersecurity threats have grown in complexity, posing devastating implications to financial institutions and customers. One way we are addressing this is by making resources of the Mastercard Trust Centre more accessible to SMEs. 
   
Another key challenge in the e-payment sector is limited infrastructure, especially in rural areas and underserved communities. We are actively addressing these challenges through Mastercard Community Pass, a shared, interoperable digital platform that issues a functional digital ID to users and provides wider access to services. It also enables service providers to effectively increase access and reduce the cost of delivering high-quality essential services to the digitally excluded and underserved. We also launched the Mastercard Naija Card in partnership with Zenith Bank in March 2024, in a bid to provide affordable banking solutions to consumers who have historically been excluded from traditional financial services.

What advice will you give Mr. President or the Minister of Communications, Innovation and Digital Economy on how to move the sector and the economy forward?
 To start, I think it is important to commend the current efforts of the government in formulating policies, guidelines, and regulations to foster the growth of the digital economy in Nigeria. These initiatives have laid a strong foundation for innovation and digital transformation, positioning Nigeria as a leader in the region.
    
Going forward, I encourage continued investment in digital infrastructure to support the expansion of digital financial services across the country. Collaboration and partnerships with the private sector to create opportunities for digital inclusion and promote digital literacy and financial education initiatives will remain vital. Finally, the development of regulatory frameworks will encourage innovation while maintaining security and consumer protection.

The payment ecosystem is still plagued by fraud. What is Mastercard doing to help stem the tide?
According to the Nigeria Inter-Bank Settlement System (NIBSS), the financial landscape in Nigeria has seen a substantial rise in fraud incidents over the past five years. The yearly fraud count has surged by 112 per cent, from 44,947 cases in 2019 to 95,620 in 2023, underscoring the need for urgent action and better strategies to navigate this development.
   

Are Nigerians embracing contactless solutions for digital payment? 
Absolutely! Contactless solutions have been gaining traction in Nigeria due to growing awareness of their benefits, including speed, convenience, and enhanced security. The Nigerian government’s proactiveness has certainly played a part in its adoption, with the Central Bank of Nigeria (CBN) implementing policies and guidelines to ensure a smooth transition from physical payments. However, the path to widespread adoption isn’t without hurdles. Limited awareness among customers and merchants, limited infrastructure, and a lack of coordination among stakeholders, remain stumbling blocks.
   

As the new Country Manager for Mastercard, what are the innovations you are bringing to the table?
As the Country Manager for Mastercard, I am excited to continue Mastercard’s commitment to constant innovation, focusing on solutions that cater to the unique needs of the local market. We are leveraging groundbreaking technology to create scalable digital solutions that broaden access to financial services across and beyond Nigeria.
  
We will continue to support increased access to cross-border transactions in Nigeria and across the continent, building on the partnerships with telcos like MTN and Airtel. These collaborations extend our reach to remote and often underserved communities, facilitating cross-border remittances and mobile money services for millions of people.