Fintechs Driving Nigeria’s Digital Economy – CBN Governor

-by our correspondent.

The Central Bank of Nigeria (CBN), has underscored the pivotal role of Fintechs in the Nigerian payment system.

Governor of CBN, Godwin Emefiele, revealed this in his keynote address at a forum organised for financial journalists in Enugu.

He noted that as financial institutions will be paying more attention to digital revolution in the months ahead, Fintechs will become more relevant in driving the industry.

“From all indication, digital revolution will be a focus for Financial Institutions in the months ahead therefore making Fintechs a major driver of the industry. Technology continues to change the face of the financial services industry. The advent of digital financial services, for example, has created faster, more efficient, and typically cheaper transactions compared to traditional financial services. As the global economy recovers from COVID-19, it is obvious that FinTech will play a more important role towards resilient and sustainable recovery.” Emefiele said.

According to the CBN Governor, Nigeria cannot afford to ignore the Fintechs challenge even as the country strives to become an active playground for digital transformation.

He said the apex bank will soon be unveiling its digital currency, the eNaira, making Nigeria one of the first countries in Africa, and indeed the world, to adopt the digitization of its national currency.

According to Emefiele, the eNaira will help drive inclusion as many Nigerians in remote areas with no access to bank services can make use of their phone features to get such services.

In the aftermath of the Covid -19 Pandemic, the CBN Governor said the operational resilience and business continuity strategies of Nigerian banks were severely tested as operational risk increased due to the increased reliance on technology and third-party service providers during the period.

“The risk of money laundering and cybercrimes have increased. There is also the elevated risk of unauthorized access to banks’ networks and data security breaches.”

“It is noteworthy that the International Monetary Fund (IMF) estimated the global economic cost of the COVID-19 pandemic at $28 trillion in lost output. In a bid to address the fallouts of the pandemic, authorities all over the world have implemented extraordinary policy measures to ease financial stability risks and we were not an exception.” He said.

In response to the crisis, Emefiele said the CBN introduced and implemented a number of measures “aimed at reducing the risk to financial stability, boosting demand and economic growth, ameliorating the impact of the pandemic on some sectors, such as the Oil & Gas, Manufacturing, Agriculture, pharmaceutical and hospitality sectors.”

According to him, key among the measures taken were the approval of regulatory forbearance to banks to restructure their loans to severely affected sectors; provision of liquidity support to banks; provision of the COVID19 Targeted Credit Facilities (TCF) disbursed to individuals and households through the NIRSAL Microfinance Bank, several CBN intervention funds targeted at the real sector, and the mobilization of the private sector to contribute to the National response under the CACOVID Initiative.

” Other complementary measures included actions to enhance the resilience of the banking industry to the threat of cyber risk and deployment of an industry wide Cybersecurity Fusion Centre (C2FC) and Malware Information Sharing Platform (MISP) to address the growing cyber risk by providing a unified interface for cybersecurity intelligence sharing and enhanced incident response capabilities .”

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