A higher interest rate compared to traditional FS, zero cost of card maintenance, zero cost on alert and holiday messages–elucidiate—- According to PWC 2017 FinTech Survey Report, Financial Services players are changing the needs as the top impacts FinTech has on their businesses. Also 60% of respondents believe that 40% of FS businesses are at a risk of standalone FinTech.
Traditional Financial Services industry in Nigeria is undergoing a major transformation driven by Financial Technology FinTech (a technology system that aims to compete with traditional Financial Methods of delivering Financial Services).
Areas of Impact
The advent of Fintech companies like Interswitch, Paystack, Remitta has seen more businesses and Government organization switch to online and card payment, this in turn has helped small-scale businesses reach more customers and reduced human-human transaction in govt. agencies which in the long run can help to reduce corruption, a good example is the transport industry disruptor GIGM is making use of Fintech giant Paystack to aid its online bus booking services, customers can easily book and pay for a ticket to anywhere online and do a check-in or get the company to pick them up from any location.
Savings/Planning/Investments and Financial Managements
Invoice Ng for invoicing, Cowrywise for money planning and Investing, Piggybank for savings: these are various ways Fintech companies in Nigeria are disrupting the financial Service sector in Nigeria by changing the way we manage and keep track of our finances. The piggybank app has changed the way we spend money by automatically debiting the card linked to your piggybank.
Access to Loans
Traditional means of getting loans has proved to be a difficult hurdle for the ordinary Nigerian, this has in turn affects small scale business as means of getting collateral is a huge hurdle for most small scale start-ups. The CBN October last year mandated all banks to give out more loans( N65 of every N100 deposited) but as at Dec 2019 it debited banks 0ver 650m for not giving out more loans, which could only means the directive of giving out more loans wasn’t complied with. The fintech industry has provided alternative means of lending, lenders like PayLater, QuickCheck and Opay keeps pouring in millions to aid quick, faster and cheaper ways for anyone or small scale business to access loans with zero or no collateral, more loans can be accessed as one builds its credit score.
According to the PricewaterhouseCoopers (PwC) Nigeria FinTech Survey 2017 report, Fintech is set to disrupt traditional retail banking by 92%. Major banking services can now be accessed from the mobile phone with USSD (GT bank 737, Zenith bank 966…) and also mobile apps (ALAT, Barter by flutter,Opay) without so much as stepping a foot at the bank. Fintech has brought financial services to the millions of un-banked Nigerians whole live in the remotest part of the Nation. With a smartphone, goods bought can easily be paid for, utility bills , make transfers. Fintech giants like PAGA and Opay has mobile agents across the nation conducting banking services.
Fintech covers a broad scope of financial areas and as technology evolves there will be further developments in this innovative sector, this has open a world of possibilities for small businesses, for a fraction of the formal cost, online transaction can now be carried out with little or no cost.” The financial services landscape is ever evolving and is digging deeper into the habits and behaviors of businesses and consumers who are using the multitude of services on offer. This insight will help grow this fast-paced and innovative industry and will begin to see developments in other areas such as virtual reality and machine learning to predict and analyze data for maximum effect” Intelligent HQ.
Fintech is changing the way we carry out our everyday traditional financial transactions and traditional banks who won’t keep up to this trend just like Nokia would be left in the dust.