KPMG Digital Summit 2017: Experts Seeks Collaboration In The Financial Technology Ecosystem

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By Anthony Nwosu

The financial services industry has continued to show tremendous developments with entry of new innovative technologies in the payment space. Also, with  promising of  new digital businesses known today as disruptors, coupled with an increasing adoption of financial  technology  (FinTech) services by Nigerians which was spearheaded by the Central Bank of Nigeria, known as ” Cashless Initiative”.  The need to fashion out modality for the Nigerian electronic payment system and reposition it as a hub in  Africa ignited a discussion among the  industry stakeholders at the just concluded “Digital Summit 2017”  organized by  KPMG, global renowned Audit, Tax, Advisory firm.

In an era the country is adopting all manner of electronic payment, the need for the regulators, stakeholders, financial  technology firms (FinTech)  and other  stakeholders to come together and brainstorm on the best way to position the electronic payment ecosystem.

One of the major issues was that need for proper standardization of  the electronic payment ecosystem in Nigeria.   Data and information sharing  within the industry  has been advised by stakeholders.   This  data sharing must be contributed by all the financial  players. Nigeria Inter-Bank Settlement System  (NIBSS) advised that; due to the sensitivity of data in the financial space, there must be  formalities before these data can be assessed and all the industry players should contribute to the pool of data that would be accessed. A situation where customer information amongst the FinTech firms is imperative and how  to get this information together and how to share it matter said NIBBS.

Cross section of participants at the event

On the role of government and regulators in the industry. It has been said that the CBN must decide what they stand for and how they intend to position the market . They can decide to either stand for the grow the local industry to a level or project Nigeria as an African electronic payment hub. The regulator must decide and position the industry. If the government doesn’t take this decision, other  countries like Kenya, Rwanda and South Africa would take over the ecosystem.

The banking system should be made scalable and made innovative. The cost of regulation and serving the financially under served is very high, this is another issue that must be addressed by the regulator. Financial deepening must be scalable and made easier in order to serve the “Unbanked” ,especially in the remote area.

Collaboration among the regulation is important ,where a single framework would be adopted. Technology should bring down the cost of compliance.

According to Adebisi Shonubi, Banking and Payment systems, CBN said that

“The regulator encouraged the FinTech to have a clear understanding of what they want to do. They shouldn’t be going to central bank if it’s not credit or loans. He encouraged the FinTech to start understanding their market and where they  intend to play in“.

He agreed that there is need to work together and it would be easier to scale. There are other opportunities for FinTech firms and once it’s not about credit and loans, there is no need to bother the Central Bank.

In the words of Bunmi Akinwuni, CEO, Venture Garden  “Nigeria is sitting in a good space and there is huge opportunities in the banks and banks should start looking at the acquisition of FinTech firms in Nigeria. ”

There is an improvement in the FinTech space , with an open environment and collaboration in the industry. In the words of Iyinoluwa Yeji, Cofounder, Flutterwave said that ” a lot of companies have become open lately and a lot of banks have started taking startups serious. ”

He also added that ” if we don’t open up in Nigeria in the terms of FinTech ecosystem,the industry won’t guard against disruptive technology. ”

Cooperative banking as a tool for financial management and access to finance, Salami Abolore , the CEO of Ruby financially highlighted on the financial inclusion using the cooperative banking model.  He said that financial management is still a huge problem in Nigeria,but, the cooperative system is a strong support system in Financial inclusion and management in Nigeria.

KPMG Digital Summit 2017 tried to answer these questions;  what is driving these record valuations and funding? Are we witnessing a mere bubble or is there substance behind these digital business models? Are these digital models sustainable? What are the market opportunities driving digital enablement and how can they be harnessed? Do we have the right regulatory environment to enable sustainable value creation through digital innovations? What will the future of financial services look like with digital? What is clear is that businesses that seek to lead must be willing to reinvent their business models to explore the opportunities that digitalization  presents.

“The main trust of this year’s summit is getting thought leaders and industry experts to share perspectives on strategic themes such as the required operating model overhaul, regulatory imperatives and the collaboration agenda necessary to drive digital innovation across various sectors of the economy, to position Nigeria as a more attractive destination for local and foreign investors”, Boye Ademola, Partner & Lead, Digital Transformation, KPMG.

 

 

 

The banking system should be made scalable and made innovative. The cost of regulation and serving the financially under served is very high, this is another issue that must be addressed by the regulator. Financial deepening must be scalable and made easier in order to serve the “Unbanked” ,especially in the remote area.

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