NDIC Pledges to Insure Fintech Depositors

By Nume Ekeghe and Oluchi Chibuzor

The Nigeria Deposit Insurance Corporation (NDIC) said it is working to enhance its framework towards protecting depositors from dangers that could arise from emerging fintech solutions.

The Managing Director, NDIC, Mr. Umaru Ibrahim, said this yesterday, in a speech he delivered at the opening ceremony of a workshop for members of the Finance Correspondents Association of Nigeria (FICAN) in Kaduna, where various facilitators deliberated on ‘COVID-19 & FinTech Disruption: Opportunities and Challenges for Banking System Stability and Deposit Insurance’.
He said he believes that fintech solutions are a catalyst to improving financial inclusion in Nigeria.

“The emergence of fintech is relatively new in this environment and the Central Bank of Nigeria has produced a policy guideline for the registration, licensing and supervision of fintechs.
“We are also involved in that and we also partner with other regulatory authorities such as Securities and Exchange Commission and well as the NCC.

“That is because each and every one of us have a role to play in the licensing and supervision and regulation of fintech.

“We would continue to develop and improve your knowledge and skills so that you are up to date in what is happening globally and locally in terms of financial system so that you can help disseminate information and educate the generality of the public so that the public remains aware and protected,” he said.

Speaking further, the NDIC boss said: “There are a lot of issues around consumer protections. As you know even, without the emergence of complicated products and services and channels of financial intermediation such biotech, even to day-to-day ordinary transactions between customers and banks.”

He added that the corporation had in recent times gotten numerous complaints and this has prompted them to further enhance their understanding of the fintech sector.

“We do have hundreds if not thousands of complaints every now and then, either about ATM- related frauds or PoS-related frauds or excessive bank charges or excessive interest charges, e.t.c.

“Almost on regular bases bank customers either are genuine, others may not be so genuinely. So all of us have a responsibility to continue to sensitive and educate the millions of ordinary depositors of this country.

“So that we can enhance and step up depositor protection awareness programmes and also continue to support the emergence of a more stable and prosperous banking systems. Without confidence of depositors and confidence of the customers there will be no banking system.”

He further added: “Managing financial system risks requires collaboration. Financial system instability increases the volatility of asset prices and investor behaviour, leading to deteriorating credit conditions, increased costs to firms and households and potentially the collapse of the payment system. “There is increasing evidence that fintech innovations have many advantages for businesses and customers.”

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