Recently, the Fintech Association of Nigeria (FinTechNGR) in partnership with EY West Africa, hosted a webinar on Fintech Census Launch2020 uncovering the Future of the Nigerian Fintech Industry (Growth, Collaboration and policy).
Speakers at the virtual Fintech Census Launch event include Jimoh Musa, Director, Payment System Management, Central Bank of Nigeria; Obi Emetarom, CEO, AppZone Group; Odunayo Eweniyi, Co-founder/COO, Piggyvest; Chuma Ezirim, Group Executive, eBusiness and Retail, First Bank of Nigeria; Anita Kimber, Partner, EMEIA Financial Services; Ameya Upadhyay, Venture Partner, Flourish; Wilfred Mamah, Head, Digital Transformation, Stanbic IBTC; Bunmi Kuku, Partner/Business Consulting Leader, EY West Africa.
Here are some of the takeaways from the Fintech Census Launch 2020 Virtual Event:
Payments, banking and lending contribute to 60% of Nigerian Fintechs by count.
Here is the distribution of FinTechs by Segment in Nigeria
- Payments and banking (38%)
- Lending (23%)
- Savings, investment ad crowdfunding (15%)
- Enterprise services and infrastructure (13%)
- Cryptocurrency (8%)
- Insurtech (3%)
Growth remains the top priority for Nigerian fintech as it grew significantly in 2020.
But scale still remains the top priority for fintech.
Here are the non-capital areas of support required by fintech
- Partnership opportunities (68%)
- International expansion and growth (66%)
- Access to new customers (65%)
- Branding, public relations and marketing (56%)
- Financial expertise (55%)
- Regulatory compliance expertise (53%)
- Operational expertise (50%)
- Strategic direction (48%)
Collaboration has improved, with banks increasingly willing to partner
Relationship with banks have improved in the past year for about half of fintech
A change in relationship with banks in the past year
- Better (52%)
- Same (45%)
- Worse (3%)
What fintech are saying:
- Banks are more willing to collaborate
- A greater amount of trust from banks and more favorable view of fintech capabilities
- Legacy mindsets still exist in some areas stifling collaboration
What banks are saying:
- Fintechs motivate banks to be more agile and customer-centric
- Fintechs must demonstrate preparation to receive partnerships
- Regulations will allow both traditional banks and fintech to thrive
- Real opportunity still exists for fintech to capture value
What regulators are saying:
- Fintech industry evolution has been ahead of regulation
- Regulations and fintech need to collaborate and communicate
- Banks are encouraged to partner with viable fintech to co-create value
Some notable policies have been recently released by regulators:
- Tiering of payment licenses
- Payment services banks
- Regulatory sandbox
- Open banking
However, regulation emerge as a top concern for fintech, second to attracting talent
- Attracting qualified/suitable talent (35%)
- Regulatory outlook (31%)
- Competition (31%)
- Unfavorable regulations (27%)
- Partnerships with incumbents (23%)
- Consumer confidence (23%)
- Cybersecurity (19%)
- Customer adoption (15%)
- Debt funding issues (12%)
- Fraud (12%)
Five key drivers that will determine success for fintech
Maintain strategic focus on fundraising; demonstrate strong market fundamentals.
Reduce acquisition costs to drive local adoption; explore expansion into African markets.
Focus on creating a sustainable pipeline for local talent.
Be proactive about regulation; anticipate and prepare for different scenarios
Build strategic partnerships across the ecosystem including regulators
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