•Insists eNaira won’t fuel inflation
Eromosele Abiodun, James Emejo and Nume Ekeghe in Enugu
The Governor of the Central Bank of Nigeria (CBN), Mr. Godwin Emefiele, yesterday emphasised the need for an increased regulatory oversight in order to proactively monitor developments in the electronic and digital payment systems amidst the growing impact of financial technology companies (Fintechs).
He said regulators must also ensure continuous safety and soundness of the financial ecosystem.
This is as the bank also clarified that contrary to speculations, the planned unveiling of the Central Bank Digital Currency (CBDC) also known as the eNaira, would not exacerbate inflationary pressure on the economy.
Emefiele stated this in an address at Enugu State, while declaring open the CBN’s 31st Seminar for Finance Correspondents and Business Editors, with the theme: “Trends in Nigerian Payments System: Regulating the Fintech Digital Playing Field.”
Represented by CBN Deputy Governor, Corporate Services Directorate, Mr. Edward Lamekek Adamu, the CBN governor noted that discussions had increased around issue of digital economy as more opportunities have emerged for financial institutions and other players within the payment ecosystem to innovate and provide more efficient options for payments and settlements.
He, however, said regulators must keep pace with these exponential developments in the digital financial landscape and leverage new knowledge and technology tools to enhance the efficiency and effectiveness of their mandate.
He pointed out that from all indications, digital revolution would remain a focus for financial institutions in the months ahead, therefore making Fintechs a major driver of the industry.
According to him, “As the global economy recovers from COVID-19, it is obvious that Fintech will play a more important role towards resilient and sustainable recovery.
“Studies have already shown that only one per cent of Fintechs have been critically affected by COVID-19 and two per cent severely affected. By comparison, around 17 per cent of other high-growth companies fall into these categories.”
He added, “It is therefore unsurprising that many Fintechs have experienced a surge in demand as working practices and customer banking habits changed.”
Emefiele further stressed that the eNaira would help the CBN in attaining its goals of fostering greater inclusion using digital channels, supporting cross border payments for businesses as well as providing a reliable channel for remittances inflows into the country.
He said with the deployment of the eNaira, Nigerians in remote areas would conduct financial activities using their digital as well as features on phone devices.
He said, “Partnering with our stakeholders in the financial industry, I believe that more Nigerians will be financially included.”
He said the eNaira, which is expected to be launched in a couple of days, would make Nigeria one of the first countries in Africa, and indeed in the globe, to adopt the digitisation of its national currency.
He said the payments system of any country play a pivotal role in its economy, being the channel through which financial resources flow from one segment of the economy to the other.
However, CBN Director, Monetary Policy Department, Mr. Hassan Mahmud, in his presentation on the “Implications and Trends in the Digital Financial Ecosystem for Monetary Policy Implementation”, said the eNaira’s impact on inflation remained zero at the moment.
Also, during a roundtable discussion on ” Creating a Secure Cyber Environment for Financial Transaction”, the panelists agreed that the protection of end-users of financial technology was paramount.
They also harped on the need for proper sensitisation of consumers in order to minimise the level of fraudulent transactions, which had cost banks and individuals a fortune.
CBN Assistant Director, Payment Management System,
Rakiya Yusuf, said every stakeholder including the consumers have the responsibility to safeguard electronic payment systems from any form of compromise.
The Chairman, Chartered Institute of Bankers of Nigeria (CIBN), Abuja Branch, Prof. Uche Uwaleke, said dispute resolution needed to be accorded attention in digital transactions.
Interswitch’s Akeem Lawal also said customer protection was paramount, adding that the focus should be on how to help customers recover funds where there is a theft.
He said to achieve safety of the digital ecosystem; the CBN’s guidelines on payment systems must be taken seriously.
In the same vein, the Chief Product Officer, Accelerex, Mr. Chuks Anakudo said as much as it was the responsibility of service providers to ensure safety of consumers, the end-users should also have the responsibility to protect their sensitive information from fraudsters and the public.
