As Nigerian Financial Technology (FinTech) firms continue to broaden their activities in the Nigerian financial services industry, the Central Bank of Nigeria said it is putting measures in place to ensure stricter regulation.
This was disclosed by the apex bank’s Deputy Governor in charge of Financial Systems Stability, Mrs Aisha Ahmad, who participated in a plenary session on “Cybersecurity Exercises: Experience from Sub-Saharan Africa” at the just-concluded World Bank/IMF meetings.
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Why stricter regulations? Mrs Ahmad acknowledged that FinTechs have disrupted the Nigerian financial industry, particularly in the areas of payment, savings, and micro-lending. In the meantime, the apex bank has taken several steps towards regulating the companies. However, efforts are still underway to do more, Ahmed said.
She explained that the CBN is working to fully identify these FinTech companies in order to better understand the nature and scope of their operations. Doing this will make it easier to regulate their activities. This is important, she said, because increased supervision/regulation would ensure that these FinTechs stick to the conditions of their license.
“We’ve seen disruptions in the savings space and disruptions in the micro-lending space. So, these are not organizations that the CBN is not aware of. But broadly speaking, our focus has been to identify these organizations.
“So if you are not a bank, you cannot get a banking license, but if you operate as a bank then we have to regulate what you do. We are looking at ensuring professionalism as well as in what we do in terms of regulation.”
Not a plan to repress: For the sake of clarity, Mrs Ahmed quickly added that the plan to impose stricter regulation is not intended to repress the activities of the FinTechs. As a matter of fact, she claimed that, “we want more companies to come up and assist because fintechs do a lot in furthering the financial inclusion objectives of the central bank.” The CBN is targeting 80% financial inclusion by 2020.
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In the meantime, however, Mrs Ahmed has expressed concerns over cybersecurity, especially as it pertains to the Nigerian Fintech space. According to her, cybersecurity is an important issue and regulations in this area needs to be constantly strengthened.
“We had some of these guidelines and frameworks in place, it’s about strengthening them and identifying where you need to improve layout regulations so that they are fit for purpose.”