The Nigeria Deposit Insurance Corporation (NDIC) says full disclosure of information about any financial technology (fintech) operator is required before licensing it.
It said concealment of information about their operations had slowed down the pace of their licensing in the country.
Dr Kabir Katata, the Deputy Director, Research Department of NDIC, said this in Yola on Wednesday at the 2019 workshop for business editors and Finance Correspondents Association of Nigeria (FICAN).
Katata said that fintech, which was still relatively new, had broad capacity which could pose some threats.
Fintech is the new technologies and innovations that are competing with traditional financial methods in the delivery of financial services.
The use of smartphones for mobile banking, investing services and cryptocurrency are examples of technologies aiming to make financial services more accessible to the public.
Katata said that the financial regulators in Nigeria, the CBN and NDIC, needed to effectively understand the space before issuing licenses.
“As an operator, you cannot say that you developed a product today and next week, you just put it out there and you want to start collecting people’s deposit or data and then, we just allow you just like that.
“Fintech operators still complain that they see regulation as a hindrance. They still say that CBN, NDIC are slow. If you think about it, we have a reason.
“If you develop something today, it needs to be tested. We need to test it a little, we also need to know you. When you hear operators say that regulators are slow, perhaps, because there are processes to follow.
“Also, there is a need to slow down to understand what is going on because there are so many new things.
“Part of the problem of Fintech with regulations is that when you are trying to understand what they are doing, they do not want to really uncover it or explain to you.
“You cannot be licensed without being understood. I am sorry.”
Katat listed some concerns of regulators for the technology to include financial stability, integrity of data in banking, appropriate consumer protection with financial literacy and digital Ponzi scheme.
Highlighting the advantages of Fintech, Katata said it could help small and medium enterprises to get access to credits, enhance competitions and increase resilience of the financial sector, if the right things were done.
“Everywhere in Nigeria, mobile banking is preferred compared to others. This year, half of online banking customers are also mobile banking users.
“It means online banking is depreciating to mobile banking and they claim that mobile banking is growing at rate of five times the rate of online banking,’’ he said.
On the future of banking, he advised banks to get smarter with each interaction with customers to meet international best practices.
He said that the technology had given rise to digital banks across the country.
The NDIC deputy director, who said that China was the leading country in fintech adoption in the world, but added that Nigeria was not doing badly in the space.