Mr Samuel Okojere, Director, Payment Systems Management, Central Bank of Nigeria (CBN), on Wednesday said that Financial Technology (FinTech) would catalyse drastic change in consumer payment behaviour, enhance market confidence and drive financial inclusion in the country.
Okojere made this known during the First Edition of the Lagos FinTech Week 2019.
The theme of the event was “FinTech: Exploring the huge opportunities’’.
He said that it was necessary to sustain engagements among stakeholders to ensure steady development of FinTechs who were defining the frontier of innovation in the financial system.
Okojere said that the financial services sector was fast evolving and both incumbents and new entrants had roles to play in enhancing service delivery while effectively managing risk.
“It is the role of all to ensure that disruptive innovation does not create instability in the financial system.
“Looking at the adoption of innovation such as Artificial Intelligence and big data in enhancing service options for consumers of financial service, we have to evolve regulatory approaches as well.
“Approaches that will appreciate the promise of FinTechs and mitigate the risks it presents.
“The CBN indeed believes that FinTechs would serve its interest in accelerating financial inclusion in Nigeria. However, this must be done without eroding public confidence in the financial system,’’ he said.
Okojere said that while introducing new service models to Nigerians, consumer protection becomes very key to developing a sustainable Fintech ecosystem.
He noted that the convergence of platforms, product and services through digitization demands that regulators should evolve a simplified inter-regulatory agency platform to support the dynamic Fintech landscape.
Okojere said that the CBN had taken the lead in the area of collaborating with the Nigerian Communications Commission (NCC) in the regulation of mobile money services.
The director, however, said that the risk of regulatory arbitrage was more potent and there was need for all regulators in the financial services sector to collaborate.
He noted that collaboration should also afford FinTechs seamless appreciation of the regulations across board and significantly reduce cost of compliance.
“Undoubtedly, our laws will also have to evolve. We have to accommodate innovation and there is increasing need for greater latitude for regulators to effectively respond to the dynamism of the FinTech space.
“The Central Bank of Nigeria hopes that the National Assembly passes the Payments System Bill as it will further promote innovation.
“Furthermore, consumer protection in terms of financial literacy and appreciation of digital financial services is very essential.
“Providers and regulators alike must work hand in gloves to raise consumer awareness on key issues of digital financial services,’’ he said.
Okojere noted that the viability and sustainability of FinTechs depends on trust in the financial system.
“The financial system operates on trust and we must work together to enhance our trust quotient before Nigerians.
“We must invest in educating the consumers, strengthening their capacity to defend their funds, even as we promote the innovation of products and service models, ‘’ the director said.
He also urged banks to join FinTechs in creating products that would help them stay in the market instead of being jittery.