Financial technology [FinTech] experts have expressed concern that the banks and fintech would need to work together to grow the banking sector.
Their stand is contained in a communiqué at the end of first quarter edition, Ennovators Breakfast Series [EBS] with the theme, “Is Fintech and Banks Best Frenemies”.
Their views are hinged on the fact that fintech has gradually inched its way into the growth strategies of traditional banks.
They said that the collaboration has become obvious globally especially in Europe and the US where the surge in fintech and its capability has helped the banks to innovate and develop products to suit customers’ lifestyles.
“In Nigeria, the same thread is apparent. Most Nigerian banks are riding high on the wave of fintech products such as USSD, banking apps, etc. Because of this, research has shown that global investment in fintech has reached as high as $80 billion between 2010 and 2016. As such, traditional banks are paying closer attention to how to regain customers’ trust using fintech”, said Yele Okeremi, MD/CEO of Precise Financial Systems.
Besides, the banks have realised that embracing fintech approach would assist improve their customer uptake.
To demonstrate the seriousness of the banks, one of the banks in Nigeria has branded itself “Fintech” bank. Will this attract customers’ attention? Will it help to drive market share? Will fintech disrupt the banking sector? Or to put it clearly, should banks engage fintechs for competitive advantage? Should banks build, partners or acquire fintech? Are fintech and banks best friends or foes?, asked the speakers.
Other speakers are Adedeji Olowe, Executive Director, Systemspecs Limited and Victor Okigbo, Adviser/Consultant on Financial Technology, Access Bank, while Emmanuel Agha - MD/CEO, Innovectives, moderated the session.
Key observations made by the speakers, that the line between being a friend and enemy is not defined among the banks and fintech; banking operation is a fallout of the infallibility of technology; fintech firms are creating what the customers want in the non-banking areas and taking it to the banks and Fintech firms can disrupt the banking landscape
They also highlighted that technology has led the way in respect to how the banks operate. That is what brought computerized banking and online fund transfer; noting that the gap between the banks and the customers is so huge. Fintech will fill that gap. Even non-banking companies are also coming into that space.
The panelists also admitted that soon, some basic things that are important to customers would be sacrosanct just like the air-conditioner in a banking hall; the USSD platform kicked off in 2014. In 2017, all the banks are offering USSD as a service. That is because customers are migrating to banks with the USSD platform; Fintech cannot survive the onslaught of the established financial institutions and the regulation. The customers will win from the onslaught.
Sola Fanawopo, event director, EBS said that the session resolved that new technologies are impacting the way the banks view and reach out to customers.
“What has made this happen is fintech. Therefore, the only way to deepen the customer relationship is for banks to collaborate with fintech.
“They also arrived at the conclusion that there is a future of collaboration between banks and fintech. There is a need to cooperate massively with fintech on a level the banks have not done before. That is what the banks want. This is what the customers want.
“The banks are looking for ways to collaborate with fintech. Banks want to hold open discussion with startups and meet them at the point of their needs.
The banks need to court the fintechs. If there is no clear collaboration between the banks and fintech firms, the banks will cease to exist, as we know it”.
The sessions also stressed that collaboration between the banks and fintech is a necessity.