It’s not new that every single year, we see a lot FinTech startups springing up, offering Nigerians financial services that sometimes fill the need to walk into a bank.
There’s the fear that FinTechs will take over the roles of the banks, and that a time will come when there will be no bank.
The question now is, are FinTech startups gradually phasing out the need for commercial banks?
Here’s what the CBN has to say about the trend:
At the Bi-Monthly Forum of the Financial Correspondents Association of Nigeria (FICAN) in Lagos, last weekend, the Central Bank of Nigeria (CBN) assured that Financial Technology (FinTech) companies will not take over the roles played by commercial banks in delivering services to customers.
The CBN Director, Banking and Payments System Department, Dipo Fatokun, noted the following:
- The demand for the services of FinTechs will continue to rise, even as they need commercial banks to enable them operate effectively.
- Increasing roles of FinTech companies in the payment system will allow banks to focus more on their traditional roles of financial intermediation, adding, however, that banks in developed world are now focusing on their core functions and leaving other roles to service providers.
- FinTechs have always been in existence, it is just that more prominence is being given to their roles. In some jurisdictions, FinTechs are being allowed, or plans are under way to allow them connect to the central bank which, previously, was the exclusive preserve of the commercial banks.
- FinTechs are not licensed as financial institutions, they cannot take deposits, they can make payments out of bank accounts.
- They can only facilitate payments or make it easier but the banks will still continue to play a very big role.
What are your thoughts? Do you think the banks still have a strong stay despite the financial services offered by FinTechs?