The Nigerian financial services sector has experienced some major technological developments within the last two decades. How much impact have these changes and FinTech advancements had on her neighbours within the West African subregion? How dependent on Nigeria are its neighbours, considering future technological improvements?
While delivering her speech after a meeting with the President and Vice President of the Federal Republic of Nigeria at the Presidential Villa in Abuja, the Chairperson of the International Monetary Fund (IMF), Christine Lagarde emphasised how dependent on Nigeria her neighbours are. According to Ms. Lagarde:
”Nigeria is one of those countries that actually has an impact not just on itself and its people, but also around it and its neighbours.”
Financial experts have easily agreed with Ms. Lagarde, and are also of the opinion that the slow pace of most FinTech developments in the West African subregion is directly related to the fact that the Nigerian market is yet to become fully captured.
Bloggers’ view on IMF’s position
Amang Saliyuk is an SEO Consultant and blogger. In his analysis, Amang states that one major reason why Nigerian issues directly affect the entire region is due to the relative size of her economy. He says:
“As the largest economy in Africa it invariably means that everything that happens in Nigeria affects its neighbours and it's people.”
Speaking further, Mr.Saliyuk elaborated on areas of technological advancements that have been achieved in Nigeria and its impact on both her immediate society and that of her neighbours. He says:
“From a financial purview using 1999 till today as a timeline I'll say the Nigerian financial services sector has not only been very receptive to new technologies but has also been a trailblazer in technological development within the country. Using the banking industry as an example, Nigerian banks have come a long way from the days of analogue banking systems to a more friendly digital banking model that has given birth to a whole new realm of opportunities for Nigeria, her citizens and her neighbours. With the advent of card services in the banking sector a lot of businesses have been birthed which in turn created jobs and opportunities for Nigerians. Services like online retailing, Joint Admissions and Matriculation Board (JAMB) registration, interbank transfers and a whole lot of other opportunities. The rise of financial technologies also coincides with the growth of the telecoms sector which acts as a service provider to the financial sector. A whole new subsector of financial/telecoms startup companies have sprung up to offer support/outsourcing services to the banking/telecoms giants and by doing so creating jobs and value to the economy and creating a huge market for international organisations especially those resident within the neighbouring countries. We see Nigerian companies expanding to other African countries and the need to repatriate monies to their host countries has led to Nigerian banks and other financial institutions expanding to such countries to offer services to businesses of Nigerian origin. As these banks open up shops in diaspora and beyond they export their expertise and technologies to their host countries and recreate the same scenarios created in Nigeria with a ripple effect that trickles down to the micro-economy.”
Amang concluded by stating that like previous technological developments, the Blockchain technology will eventually be deployed in Nigeria but not any time soon. He said:
“Blockchain technology sooner or later would be embraced by the Nigerian systems, but I don't see it being deployed in the industry any time soon because of the technological deficiencies in Africa and the lack of the political will from the government.”
Financial services’ attitude
His reasons include that Nigeria has the largest economy in the region, he also states that a significant proportion of the products and technologies employed in those countries, whether of Nigerian origin or not, are exported to them from Nigeria.
Considering the banking sector, Babatunde says:
“We have the biggest banks in the region and those banks are operating across the region.
If our productive capacity shrinks, they suffer because they don’t have Nigerian supported services which they need. I am sure that they also produce lots of stuff which they sell to us and if we stop buying, their business shrinks.”
Mr. Ajayi says that the Nigerian financial services sector, is not just open to technology but are already extremely dependent on it.
“Technology enables us keep track of transactions, keep proper records, make large transfers of cash, communicate with counterparties across the world, e.t.c.
Technology is our friend very so often, the frontiers of technology are expanded in the sector and we want to be sure that the technology fits the need.”
An ex-banker with Investment One Financial Services Limited, Ekene Isiuwe is also in total agreement. Ekene’s words:
“She is the IMF chief so she will know a thing or two about it. A statement like this from a top banker like the IMF chief is like a stamp of credibility. And to the current reforms going on in FineTech, investors will look at it as one of the reasons in the advantage of Nigeria and the subregion to make an informed investment decision and Nigeria being a huge and highly untapped market is the place to go and if the Blockchain will reduce workload, cut cost and bring income, it is always welcome.”
It is beginning to look like Nigeria is not only ripe and ready for the new wave of technological advancements which includes Blockchain Technology, but the West African nation appears to be the most reasonable channel to penetrate the market of the entire subregion.