The use of technology in the finance industry has brought a lot of change to the financial sector, first it was providing support services to banks and other financial institutions but now it’s staying in the forefront and offering these services themselves.

This use of technology to solve financial issues and provide solutions is called Fintech.

The evolution of Fintech in Nigeria wasn’t as swift as some might believe, it was a gradual and almost drawn-out process as the pioneer firms weathered a lot of challenges and setbacks.

The financial sector is supposed to meet the following needs, financial inclusion, and that institution and everyone involved makes a profit. Fintech in Nigeria has met these needs to a good extent.

Fintech’s prominent history can be traced back to 1986 when Banks started using Technology to man the frontend and backend of their operation.

In 1996, Allstates Trust Bank was granted permission by the Central Bank of Nigeria to use a closed system electronic purse that offers e-payment products.

Diamond Bank in 1997 also developed an e-payment product called PayCard. Another e-payment product called Valucard was introduced in 1998 by Smartcard Nigeria Plc.

Smartcard Nigeria Plc e-payment product was made by an aggregation of nineteen different banks who developed and managed the e-payment product.

In the following years, little variations were seen in fintech and its contribution to the financial sector.

However, in 2007 the Central Bank of Nigeria passed the Payment System Vision 2020 bill, and this according to some encouraged more evolution of fintech in Nigeria.

Interswitch, Etranzact, and SystemSpecs were then the major players in the fintech ecosystem in Nigeria.

These fintech firms were founded by Michael Elegbe, Valentine Obi, and John Obaro respectively.

Interswitch introduced the first Nigeria Automated Teller Machine (ATM) in 2018. The ATM has connections to all banks as it uses transaction-switching technology and is available round the clock.

Etranzact developed and introduced a payment system that is used by different institutions for different purposes.

Schools used it to collect fees, government firms used it to collect revenues.

Subsequently, the push for more financial inclusion, improved acceptance of the already introduced technology encouraged fintech innovators.

Internet banking, Mobile Apps, and the use of USSD code for financial transactions were introduced.

The internet and mobile penetration helped sustain these fintech innovations. As once they were proved to be reliable and faster routes for transactions, the market grew steadily on its own.

This growth was compounded as it saw the sprout of many fintech startups that meet different needs in the financial sector.

Some of these startups are Paystack, PiggyVest, Kudi, and a host of others.

Now, Nigeria is categorized among the top three African countries with a high fintech adoption rate. And a lot of foreign investors are willing to invest in this sector.

But, the regulations that govern the financial sector are still not favourable to them and the teeming youths of the country.

Cryptocurrency is seen as both the present and future trend of fintech. Though it’s difficult to regulate, many countries have found a way to put some form of check on its activities unlike the outright ban of its use in Nigeria.

So now, Nigeria is still at that point where the telcos are developing their mobile money platform seeing as only MTN has put out theirs called MoMo Monie. It is believed that the other networks will still introduce theirs.

Future prediction on the evolution of fintech in Nigeria suggests that fintech will spread out to encompass every transaction process in other sectors such as health, insurance, education among others. However, Nigeria’s SEC regulations will be amended for these to be achieved.

About the author

Chibuzor Elizabeth Chijioke a graduate of Abia State University is a Nigerian-based entrepreneur and content writer. She trained as a digital marketer at Innovation Growth Hub. She is committed to teaching people how to apply technology to better their lives and businesses. She spends her leisure reading sci-fi and fantasy novels.

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