There is no gainsaying the fact that providing financial services has solely been the responsibility of commercial banks for ages, but at a point in time, customers were not receiving the best possible service, due to unnecessary delays and lack of scalable technological solutions. In those days, a customer could spend a whole day in the banking hall just to make a third-party cheque withdrawal.
It, however, got to a time when bank customers could no longer bear the unsatisfactory services they were receiving from the banks. The banking sector tried to improve on its service delivery by embracing universal banking, but there were still some grey areas that made customers clamour for improved quality of service.
Fast forward to a few years down the line, the concept of financial technology was introduced with the aim of breaking up the monopoly of commercial banks in the provision of financial services. This disruption came on the backdrop of the financial global crisis of 2007/ 2008 and since then, it has continued to lead disruption in the global banking industry as well as commerce and trade.
Fintech describes a new technology, set out to improve and automate the delivery of financial services. Primarily, it is utilised to help companies, business owners and consumers, to better manage their financial processes, by utilising specialised software and algorithms that ultimately make transactions smoother and less troubling.
Many of the fintech service companies are, therefore, currently disrupting the financial services space in Nigeria, for the ease of users, with some, having loads of other additional services its users can enjoy. When the fintechs emerged in the 21st Century, the term was initially applied to the technology employed at the back-end systems of established financial institutions. Since then, however, there has been a shift to more consumer-oriented services and also, a more consumer-oriented definition. With the rise of fintech, small businesses have been open to a myriad of possibilities that, they can now offer as additional services. Artificial intelligence, machine learning and data-driven marketing are part of the new possibilities that the financial technology service has brought to the table.
A PricewaterhouseCoopers 2017 Fintech Survey Report says that more than 62 per cent of customers will use mobile applications to access financial services within the next five years. What does this indicate? Beyond online payment, fintech companies are poised to offer myriads of options to their users. These possibilities now offer progressive entrepreneurs and business owners’, channels to get up to speed with the latest development in the fintech space, not just to get them informed, but to ensure that it is part of their daily existence.
Having an awareness of the current opportunities that the industry has to offer, will certainly bring about some improvement in transactions particularly as it affects small businesses.
The adoption index from the survey earlier mentioned, also, indicated that, a third of the male consumers, use at least two, or, more Fintech services, with an increasing awareness on the part of the consumer, that it is becoming part of their life.
With the advancement in technology, the Nigerian fintech space, has streamlined its offerings, so, as to be more efficient in cutting down the unnecessary cost associated with financial transactions. One of the fintech companies, working towards revolutionising the general financial sector, is VoguePay, a start-up founded seven years ago. In the words of its CEO, Michael Simeon, “from our own perspective at VoguePay, we have already developed a comprehensive banking solution. Going by the way we deployed, we would be working with various banking institutions across microfinance, retail and investment banking to provide increased efficiency while strengthening customer capabilities, analytics and transactions.”
He went on to state that, “the digital bank capabilities that we have created, will be given to a lot of banks and some banks have already started taking advantage of it and would be deploying those capabilities later this year. The difference between what we do is the unique experience in the services we provide,” Simeon concluded.
Going by the innovative efforts by various fintech start-ups, it is obvious that traditional banking and trading services that were once on the platform of commercial bank branches and operated on desktop computers will now be readily available at the touch of one’s fingertips. With trends moving towards mobile banking, accurate analytics and access to an increasingly decentralised system, users of fintech solutions will be exposed to multiple options that will give them great benefits.
As the industry awaits the entrance of telcos into the space, it is important to emphasise that collaboration is the way forward. It is hoped that all the banks in Nigeria will take a look at the suite developed by a forward-looking start-up such as VoguePay, and key into its implementation, for the benefit of the banking public. They should not view the innovative revolution as an affront, or, in a bad light, but as an imminent collaboration for the benefit of the players in the financial sector of the economy.
Today, fintech start-ups serve as payment gateways in various capacities, such as in the e-commerce industry, receiving payments from customers all over the world, thus, enabling customers more options for payment and collection, as well as various bills payment systems for educational institutions, religious bodies and other not-for-profit organisations, are still the primary functions that the fintech industry will be pursuing until hopefully, transactions in major parts of the country go fully digital. I believe that the less physical cash people carry, the better for our nation in terms of dealing with corruption.
The days ahead will certainly be interesting as competition is expected to increase with the entrance of the telcos. I call on the fintech industry to be open to mergers and acquisitions as a way to ensure that the industry does not get run over by a Goliath, even though I admit that David will always have an ‘unassuming’ stone capable of destruction.