Vice President Yemi Osinbajo has urged banking industry in Nigeria to brace up for disruptive innovations, warning that no one can stop the progress in technology.
Professor Osinbajo stated this on Tuesday while declaring open the 12th Annual Conference of the Chartered Institute of Bankers of Nigeria, CIBN, in Abuja.
The vice president said Nigeria’s 117 million telephone users have created a huge market where financial technology companies would play an active part in the banking industry.
“There is a huge market out there—the FINTECH businesses and all of that, that appears to be somewhat outside the formal banking system,” he said.
Professor Osinbajo said he has been speaking with telecommunication companies and banks to seek for ways of resolving issues that could arise from advancement in technology.
“There is a fair amount of tension going on because, obviously, the telecoms appear to take the launch of banks and everyone is saying, no, you can’t go that far; you can’t do this; you must become a licensed bank and all that. And a lot of FINTECH companies are doing a lot of incredible things across borders and we are at a point where you cannot anything; you can’t stop the progress going on; there is no way,” Professor Osinbajo said.
Noting that the banking industry was being disrupted by advancement in technology, he said; “we must sit down and develop policies—policies that would enable the FINTECH to grow; policies that would find space for telecoms also to grow.”
According to him, a lot of young Nigerians who are members of the creative group of the Industrial Policy and Competitiveness Advisory Council have shown how government could modify policies and rules to enable them, not just to access credit, but also for banking licenses and other financial institution licenses.
He said that response of the Central Bank of Nigeria and banks in Nigeria has been progressive.
The vice president also advised the Nigerian financial services sector to redefine and challenge itself to partner with public sector and players in the capital market.
Professor Osinbajo said this was necessary for the industry to key into the opportunities offered by the Africa Continental Free Trade Agreement, ACfTA, which President Muhammadu Buhari signed in Niamey, Niger, this year.
“We have great opportunities to extend the reach of our banking and financial services across Africa where we are already making waves, and export more where we are already exporting especially in fast moving goods, cement and now FINTECH. But we must improve infrastructure to expand our manufacturing base, and produce cheaper.
“This is crucial because we are also the target market for all Africa…We are already faced with the threat of smuggling will now have to contend with the threat of dumping.
“This is why the current stage of negotiations on the AfCTA is crucial,’‘ he explained.
Dr. Joseph Nnanna, who represented the Governor of the Central Bank of Nigeria, reminded bankers in Nigeria of the trends in the industry and the need to keep pace with them.
“Today, the Central Bank of Nigeria is calling on the banking system to be alive to its responsibility
“We cannot concede of an economy without banks, neither can we conceive of banks without economy…What I’m simply saying is that the days of arm-chair banking, playing in the treasury bill space, those days are right behind us,” Dr Nnanna said.
He challenged bankers to support government in asset creation and in the creation of jobs for Nigeria’s teeming population.
The President of the Chartered Institute of Bankers of Nigeria, CIBN, Professor Uche Olowu, said; “financial institutions must re-imagine banking within the context of our daily lives, our routine, our needs, our desire and impact on our future.”
Professor Olowu said the 12th Annual Conference of the CIBN was significant because it also marked the 125th anniversary of the banking industry in Nigeria.