‘Banks Will Lose Busineses to FinTech without Collaboration’

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By Emma Okonji

Given the speed of technology evolution across all facets of the economy, financial experts have warned that banks will lose large chunk of their busineses to financial technology operators otherwise known as FinTech, if the banks delay any further to collaborate with FinTechs.
FinTechs are technology solution providers, whose solutions are currently disrupting the old and traditional ways of financial transactions.
The financial experts therefore advised Nigerian banks never to feel threatened by the emergence of FinTech operators in the financial space, but to rather see them as technical partners in business and make haste to collaborate with them.

The financial experts were of the view that banks would lose greater percentage of their customers to FinTech, should they play down on collaboration. They explained that customers taste and lifestyles are fast changing with technology evolution in such a manner that customers are seeking better technology solutions that will enable them carry out financial transactions from their mobile devices without going to the banking hall and without even opening a bank account. They said such solutions were currently being offered by FinTech, and that the way forward is collaboration that will drive efficiency and sustainability.

The financial experts that were drawn from within and outside the country, were assembled together in Lagos for a two-day Disruptive Innovation conference, at the instance of Interswitch, a major player in the FinTech space.
The experts who spoke at the conference, insisted that the current trend of opportunities for banks was not about building physical bank branches, but by creating banking apps that would bring about ease and comfort to financial transactions and that the best way to achieve it is by aligning with FinTech to develop new technology apps.

In his keynote address at the Interswitch Disruptive Africa conference, one of the speakers, Brett King, popularly known as ‘King of Disruption’, an Australian entrepreneur and author who co-founded a New York mobile banking company called Moven and published several books, focused more on artificial intelligence (AI) in technology evolution, and explained that given the rate of technology growth, Africa and the entire globe would soon be ruled by AI technology applications. He advised all sectors, especially the banking sector, to be prepared to embrace the disruptive innovation that would come with artificial intelligence.

King said banking transactions have moved from Bank 1.0, 2.0, 3.0, to 4.0, and advised banks to adapt to the changes through collaboration with FinTech, or lose their bank customers to FinTech players that are already creating apps that enhance banking transactions.
Founder, CWG Plc, Austin Okere, an Entrepreneur in Residence at the Columbia Business School, New York, who spoke on regulation as an aftermath of the emergence of FinTech, said: “The world is tilting towards digital currency, a situation where banks will no longer be custodian of physical cash, and this calls for a new regulatory framework that will enableFinTech thrive in the financial sector.”

One of the Directors at the Central Bank of Nigeria (CBN), Musa Itopa, who represented the Director, Banking and Payments System Department at CBN, Dipo Fatokun, said: “The banking operation is gradually shifting from physical bank to banking services, driven by FinTech and the regulation has to change from what it used to be.” Be essence, he said, was to maintain financial stability and ensure fair play between the banks and the FinTech.
The Chief Executive of Officer of Diamond Bank, Uzoma Dozie was of the opinion that the traditional method of banking acquired from the western world, are becoming too expensive to the banks, owing to the increased size of bank customers, and that the new wave of banking is digital. He therefore admitted that banks must coexist with FinTech to provide more efficient and cost-saving services to bank customers.