In collaboration with Central Bank of Nigeria (CBN), Nigerian Government is making new attempts to regulate FinTech companies. This was confirmed during the Annual General Meeting (AGM) of Nigeria electronic Fraud Forum (NeFF) on Thursday, 28 June 2018.
According to Mr. Dipo Fatokun who is a director at CBN’s Banking and Payments System Department, “Because of the importance of these FinTechs, CBN is drafting guidelines that would enable their regulation and supervision to be put in place.”
However, the CBN has made it clear the new regulations are not negative to the industry. It is not aimed at slowing down innovation in the conservative finance industry.
Fintechs Are Not Threats To Traditional Banks
Lots have been said about the role of FinTechs in the Nigerian finance industry. A major concern has also been raised that FinTechs could displace traditional finance industries. But, this worry is nothing but a ruse.
Fintech companies, as typical of startups, are very innovative companies specializing in financial services. These companies are lean and usually focus on a particular area of the finance industry. For instance, companies like Flutterwave and PayStack focus on payments processing; while companies like PiggyBank and Paylater.ng focus on saving and loans.
Yet, none of these companies has made the leap to develop into a full-scale bank. And thanks to their limited nature, these companies have limited regulatory limitations, thus, allowing them more room to disrupt the finance industry.
Credit: technext.ng