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Nigeria: CBN to enhance regulation of fintech's digital payment field

For safety of financial ecosystem, CBN to enhance regulation of fintech digital playing field

Nigeria's payment space is evolving as the use of digital payments is on the rise. This trend has caught the Apex banks' eyes as it plans to enhance regulations in this space.

The plan of the Apex bank was revealed in a statement by the CBN Governor at the 31st Seminar for Finance Correspondents and Business Editors in Enugu with the theme, "Trends in the Nigerian System: Regulating the Fintech Digital Playing Field."

The CBN Governor, who was represented by the Deputy Governor, Corporate Services, Mr. Edward Lametek Adamu, said: "The post-COVID economy is predicted to be dominated by certain trends including a radically altered financial industry landscape as the accelerated shift towards digital financial services will attract more fintech investment and encourage competition to traditional financial institutions.

“This calls for an Increased and intensive regulatory scrutiny on the part of regulators to proactively monitor developments and ensure the continuous safety and soundness of the financial ecosystem. It is therefore imperative that Regulators must keep pace with these exponential developments and leverage new knowledge and technology tools such as Regtech and Suptech to enhance the efficiency and effectiveness of their mandate.”

He noted that the fintech and digital revolution was slated to spur up growth and recovery globally and in Nigeria.

21 percent of Fintechs in Nigeria deals with payments - Inclusion Times data

He added: “From all indication, digital revolution will be a focus for Financial Institutions in the months ahead therefore making Fintechs a major driver of the industry. Technology continues to change the face of the financial services industry.

“The advent of digital financial services, for example, has created faster, more efficient, and typically cheaper transactions compared to traditional financial services. As the global economy recovers from COVID-19, it is obvious that FinTech will play a more important role towards resilient and sustainable recovery.”

Regulations makes or mar the fintech ecosystem. Research has shown that Fintechs thrive in a friendly regulatory environment. However, in the case of Nigeria, regulations has not been that friendly, and it has led to some fintech adjusting their business model, or see some exit the market. It will be interesting to see what the CBN regulation plans are in the future.

Nigeria in focus

GDP: $432.294 billion in 2020 compared to $448.12 billion in 2019

Population: 206,139,587 in 2020 compared to 200,963,03 in 2019

GDP per capita: $2,097 in 2020 compared to $2,229 in 2019