I pay great attention to leaders of honour whenever they speak in the public domain. I invariably do so, because I’m strongly of the notion that I could deduce something of societal importance from their words.
In the maiden edition of the African Investment Forum (AIF) as organized by the revered African Development Bank (AfDB), which held few weeks back in Johannesburg, South-Africa, in his speech, the Nigeria’s Vice President Prof. Yemi Osinbajo tendered an avowal that caught my attention.
He declared categorically that time had come for the banking sector in Nigeria, Africa in general, to invest in Financial Technology (FinTech) as he stressed the need for the banks to carry out urgent reform so as not to be caught off-guard by rising innovations in fintech space.
Prof. Osinbajo who noted in strong terms that the effect of new innovations in fintech was unavoidable, stated “They have to invest in some of the fintech companies, and they have to see this revolution as inevitable. I think what we are seeing today is the reform around that space. And many of the banks are looking up and understanding that this is going to happen, and it’s already happening”.
It’s noteworthy that the AIF is a meeting place for investors who are keenly interested in Africa. It, thus, showcases bankable projects, attract financing, as well as provide laudable platforms for investing across multiple countries.
The President of the AfDB, Dr. Akinwunmi Adesina had in his opening address, disclosed that the goal of the forum was to allow investments land smoothly on investment runways in Africa, adding the forum was a 100% transactional platform to develop projects, fast-track the closure deals and improve the business environment for investments to thrive on the continent.
Fintech is the new technology that aims to compete with the traditional financial methods in the delivery of financial services. It’s a modern industry that uses technologies to improve activities. It’s simply a buzzword within the banking sector. It’s the simple task of replacing paper-based processes with software and applications.
Those days, fintech – which is primarily the use of technology across all financial functions – was mainly used for back-office activities by leveraging software to help bank personnel handle accounts, execute transactions, and manage client databases, among others.
But nowadays, fintech has transformed how banks operate. It’s not anymore relegated to the gloomy corners of back offices. It has, therefore, taken centre stage by making itself indispensible to client-facing processes. Every needed digital transaction is currently possible.
The role of mobility in the fintech revolution cannot be overemphasized. The penetration of Smartphone provides clients with an easier method to interact with banks, hence gain real-time views into their bank accounts. However, as mobile apps grew in sophistication, so did client demand for intuitive banking services.
To assert the least, the emergence of digital services in the banking sector coupled with the invention of mobile devices has significantly transformed the very nature of banking globally. Clients no longer have to contend with long queues and wait all-day to deposit cash, conduct trades or even request cheque books.
Ironically, this commendable innovation generally referred to as fintech has intriguingly constituted tremendous stress and troubles among bank clients in this part of the world, perhaps owing to inability of the key players in the said sector to duly and tactically key into the inevitable revolution. This could be what prompted Prof. Osinbajo’s avowal at the AIF.
The drivers of the Nigeria’s banking sector must wake up to their responsibilities as regards fintech. They need to acknowledge the fact that the tool in question has at the moment obviously changed the game for the financial services industry by the introduction of chat bots for client service, machine learning and AI fraud detection, Omni-channel banking, biometrics for stronger security, and block-chain for digital transactions.
It’s worth noting that Omni-channel banking style alone has made establishment of more bank branches in several localities an obsolete practice. As banking shifts from being a branch-specific activity to one that permeates all digital channels, the importance of having multiple brick-and-mortar bank offices decreases.
Research shows that the adoption of Omni-channel banking is driving many banks to reduce the number and size of their branch offices. For instance, survey indicates that in Europe alone, nearly 9100 bank branches were shut down by the end of 2016 as a result of higher adoption of electronic payment system and online/mobile banking.
The amazing merit of this mechanism is that it reduces the cost of banking, thereby yielding more profit in the business. Hence, investors or prospective ones are encouraged to capitalize on this.
Sometime ago when I encountered problem with my Automated Teller Machine (ATM) card as regards online payment, I had to go to the nearest branch of the concerned bank to lay a complaint and equally fix the fault. You wouldn’t believe that I had to wait for many months before the plight was solved. Ordinarily, such an anomaly is something that ought to be addressed right in my bedroom without contacting any banking personnel.
It’s thus needless to reiterate that it has become imperative for the Nigeria’s banking sector to make strategic investments in innovative technologies towards upgrading their operations and delivering seamless services for higher client retention.
The government on its part, via the Central Bank of Nigeria (CBN), ought to introduce wholesome cum relevant policies and review them regularly with a view to ensuring that the various banks are invariably equal to the task. Think about it!
Comrade Nwaozor, National Coordinator of Right Thinkers Movement
writes via frednwaozor@gmail.com
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