The Central Bank of Nigeria (CBN) has said that it would continue to monitor Financial Technology (FinTech) companies in Nigeria as well as manage the risks associated with their activities. The apex bank which regards FinTechs as an important sector in its operation, has assured it will work towards minimizing the risks associated with their operations to the consumers and financial institutions
This was disclosed by the Director, Banking Supervision Department of CBN, Mr Mustapha Haruna, Director, Banking Supervision Department, CBN, who was represented by Adekunle Adeniji, Assistant Director in the department, at the end of the 31st Finance Correspondents and Business Editors seminar on Thursday, in Enugu.
According to NAN, the two-day seminar, which was organised by the CBN, had “Trends in Nigerian payments system: regulating the fintech digital playing field” as its theme.
What the CBN Director is saying
While speaking on the topic, Haruna said, “The Fintech phenomenon: implications for supervision and regulation.“
Haruna said that as a regulator, the bank would ensure opportunities in FinTechs were properly harnessed. “So, as we onboard fintechs into financial services, we need to have a proper understanding of the technology companies and what risks they bring; and then we need to effectively manage these threats — threat to consumer data protection, among others.
“While we may not exactly eliminate these threats, we must ensure that we are able to minimise those threats to consumers and to financial institutions, as well as the financial system and its stability.
” Authorities also need to ensure that regulated government entities, necessary government structures will identify and manage all these risks arising from the use of these activities.’’
He also said that another reason the CBN needed to keep an eye on the Fintechs was because of the huge market value in its operations globally which is projected to hit about $310 billion by next year.
He revealed the census carried out by Ernst and Young, known as the Nigerian Fintech Census 2020, revealed that fintechs in Nigeria would have raised more than $439 million to boost the sector by the end of 2020, pointing to the significance of this sector in financial services, inclusion and in what we do.
He said that it was extremely important that the bank kept tabs on this sector so as to continue to ensure a safe and sound financial system stability.
He said that the report also showed that 55.7 per cent of all capital investment in fintech space, were foreign direct investments while 43 per cent was got locally within the economy in Nigeria.
What you should know
Nigeria has become an attractive investment destination for fintech firms in recent times.
The CBN Governor, Godwin Emefiele, had earlier said that Nigeria’s payment system received around $500 million in investments due to increased level of confidence between 2015 and 2020.
Emefiele admitted that in the past few years, the sector has experienced incredible growth which the apex bank hopes to continue to support in terms of regulation and customer protection.
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