The Central Bank of Nigeria (CBN) has stated that it needs a proper understanding of Fintechs and the risk they pose, especially regarding data protection.
This was disclosed by Mustapha Haruna, Director, Banking Supervision Department of the CBN, represented by Assistant Director, Adekunle Adeniji.
According to reports, 55.7% of total capital investment in the fintech industry came from foreign direct investments, while 43% came from within Nigeria’s economy.
What the CBN is saying
He said, “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 said.
Haruna also said that another reason the apex bank needed to keep an eye on the Fintechs was because of the huge market value in its operations globally.
He said, “the market value of fintech companies globally is projected to hit about $310 billion dollars by next year.”
He said 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 dollars to boost the sector by the end of 2020.
This, he believes, emphasizes the importance of this sector in financial services, inclusivity, and what we do.
He stressed the importance of the bank keeping an eye on this sector in order to maintain the financial system’s safety and stability.