As “money is going digital” around the world, with central banks from England to China publicly floating the notion of issuing their own national digital currencies, it has become imperative for Nigeria and other developing economies to innovate on technology that will even cater for needs of rural dwellers.
Conceptually, the idea of harnessing the upside of the digital revolution; mobile payments in particular, while preserving the existing legal and regulatory set up, practically, demonstrate the significant cost savings, a reduction of operational and fraud risks in the current payments systems, that blackchain, for instance, will bring in strengthening the ability to execute monetary policy.
“From a consumer’s perspective, the prospect of total digital money is still mind-boggling. It is more likely that societies would not go completely digital overnight. Instead, central banks could start issuing digital currency units alongside notes and coins as base money, and adjust the mix over time, according to uptake. Once critical usage levels are reached and network effects kick in, universal adoption could happen very quickly”, said Austin Okere, founder, CWG Plc and Entrepreneur in Residence, Columbia Business School, New York.
He made the remarks while speaking on “The Fintech Challenge and the New Face of Banking”, as chairman at the 3rd Quarterly Forum organized by the Nigeria Information Technology Reporters Association (NITRA).
NITRA, is an umbrella body for journalists reporting information and communications technology in Nigeria organized its third edition of her quarterly forum tagged “Digital Payment: Prospects and Challenges of a Financially Inclusive Nigeria.” recently in Lagos.
Okere Continued: “For me the biggest thing that has happen in ICT development here in Nigeria properly in Africa is the advent of broadband and Smart phones,
“The combination of broadband and smart phones makes it possible that we can do business modules that has never existed before, such as what you are discussing today, “Digital Payments,”
“If not that we have broadband and smart phones it will be impossible for this business module to exist or to book flights and buy things online.”
He added that money is going digital around the world; central banks from England to China have publicly floated the notion of issuing their own national digital currencies.
They like the idea of harnessing the upside of the digital revolution; mobile payments in particular, while preserving the existing legal and regulatory set up.
The founder of Computer Warehouse Group noted that the changes coming financial sector will be as large as the original invention of the internet, and this may not be overstated.
Who would have imagined a decade ago that e-commerce, championed by Amazon and Alibaba will be displacing high street retailers, or that ride hailing will be dominated by UBER, a technology platform.
He stated that a report carried out in 2015 by Goldman Sachs estimated that $4.7tn of financial services revenue is at risk of displacement from Fintech groups.
The key to this revolution lies in Cryptocurrencies such as bitcoin.
But it is their underlying technology that is proving to be of practical benefit to organizations, the famous blockchain.
He added that Regulators are now helping Fintechs because they believe that Fintech firms are small enough for any problems to be manageable, and on the other hand, might produce useful innovation.
He said that the future of Fintech is bright.
“Accenture recently released a report which found that investment in Fintech around the world has increased dramatically from $930 million in 2008 to more than $12 billion by early 2015.
“The lucrative global transfers markets are major target by Fintechs.
“International money transfers, which have long been a thorny issue for entrepreneurs, are getting easier as well.
“For smaller transactions, services like PayPal automatically convert currencies, so it’s easy for a customer to purchase goods from anywhere in the world.
“Additionally, a service called TransferWise is streamlining international money transfers, disrupting that sector by offering a 90 percent discount on traditional bank transfer fees