BY VICTOR OSOWOCHI – The Nigeria Deposit Insurance Corporation (NDIC) is upbeat that deployment of Financial Technology (FinTech) solutions and tools remains key in modernizing its data collection and analysis processes.
Consequently, the Commission has set its eyes on addressing safety challenges and emerging issues surrounding application of technology to drive a robust, sound and safe financial system in the country.
NDIC’s Managing Director and Chief Executive Officer, Ibrahim Umaru, said increasing evidence indicates that Fintech innovations have numerous advantages for businesses and customers, such as enhanced market competition and financial inclusion.
Delivering the keynote address at the Finance Correspondents and Business Editors’ seminar in Kaduna, Umaru however admitted that the Commission is faced with addressing areas of concerns about Fintechs.
According to him, these observable concerns notwithstanding, the Commission will not relent in leveraging on Fintech tools to update data collection and analysis processes for effective mandate delivery.
The NDIC Chief Executive further said; “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. The World Economic Forum, 2017, suggests Fintech is “disruptive”, “revolutionary”, and armed with “digital weapons”, that will “tear down” traditional financial institutions.”
Acknowledging that “Fintech will enhance market competition and financial inclusion”, Umaru however said the increasing sophistication and proliferation of technology in banking operations will also usher in unintended consequences like operational and legal risks, as well as the security of consumer personal data.”
Similarly, he said conscious moves at managing risks associated with emerging technology without stifling innovation are on the front burner for all stakeholders, especially among regulators and policy makers.
He said these robust moves have manifested in the Central Bank of Nigeria (CBN)’s recently released draft framework for regulatory sandbox operations to encourage innovation, especially for Startups.
Equally, the NDIC has established an ‘Innovation and Fintech Unit’ to “drive its agenda for emerging technology and provide solutions to improve the safety of depositors and the banking system.”
Umaru however pointed out that; “The recent experiences of technology giants selling consumer data without consent or authority is a cause for concern.”
