banking

Banks, Telcos Urged to Develop Cross-sectoral Collaboration to Drive Technology Innovations Necessary for Financial Inclusion

September 16, 2021

Vice President Yemi Osinbajo has urged the banking sector and the telecoms operators (Telcos), to develop a cross-sectoral collaboration that will further drive technology innovations that are necessary to achieve Nigeria’s financial inclusion goals.

Osinbajo stressed the importance of collaboration during the 14th Annual Banking and Finance Conference, which held simultaneously in Abuja and Lagos, and streamed online from both locations.

Such collaboration, he said, should be extended to Financial Technology (FinTech) players, who are currently creating positive disruptions to financial transactions, through their technology solutions.

According to Osinbajo, “Bankers are afraid of the telcos and they are very skeptical about them, but financial inclusion demands that innovators in the telecoms sector, must come up with products and services that are diverse and heterogeneous, which give room for wider collaboration between banks and the telcos. To make this work, government, on its part, must promote financial literacy through policy implementation that will help people have the knowledge to make the right financial decisions.”

He said only 29 per cent of agent banking operators are in the rural areas, while further stressing the need to scale up financial inclusion strategies by leveraging mobile technology even in rural communities.

He said banks must take advantage of the rapid changes in technology to further drive the financial sector.

He further said: “This means that banks must also collaborate with FinTech companies and payment service companies, to drive seamless financial transactions in the country. Banks must leverage the data provided by the Nigeria Inter-bank Settlement System (NIBSS) and the Bank Verification Number (BVN) for data information that will help both the banks and government to plan well. The Central Bank of Nigeria (CBN), for instance, can use the data obtained from banks to issue a global standing instruction policy that will make it possible for banks to recover their loans from borrowers across other banks. This will help reduce incidence of non-performing bank loans and also expand personal and business loans on a much wider basis.”

Osinbajo added that financial inclusion remained critical to the digital development of the country, with clear case objectives to recover loans faster in the financial sector. He therefore said that access to financial services was particularly important for those outside of the financial inclusion ecosystem, which he insisted, would enable them to develop loan facilities.

The Vice President however thanked the banks for the critical roles they are playing in advancing the country’s digital economy drive, especially their roles in the delivery of the federal government social investment programme, by making it easier for government to make payments to the beneficiaries of the programme in several locations, across the country.

Osinbajo also challenged the banks to step up their support for the African Continental Free Trade Area (AfCFTA), which he said, would further support financial transactions in the free trade area.

“It will be important to develop inter-regional and continental payment system to facilitate the expected increase in the trade of goods and services in the free trade area. It will also be good if the proposed Pan-Africa payment and settlement platform that is being promoted by Afreximbank, gets the support of the banks and the finance industry, so that Africans can have a system that works for cross-boarder payment system across the continent.

“The banking sector has remained one of the most stable sectors since the last century, but the next decade promises to bring about fundamental changes in the financial sector, which Nigerians are beginning to see, through the rise of FinTech companies, blockchain technology and the role of digital currency,” Osinbajo said.

The Chairman, Conference Consultative Committee and Group MD/CEO, Access Bank Plc, Herbert Nwigwe, assured Nigerians that deliberations at the two-day conference would help to further drive financial inclusion in Nigeria.

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