By Gift Olivia Samuel, The Sight News
The Governor of the Central Bank of Nigeria, Mr. Godwin Emefiele has said that as the global economy recovers from the COVID-19 pandemic, Financial Technology (FinTech) will play a more important role towards resilient and sustainable recovery.
This is just as he noted, that studies have already shown that only 1 percent of FinTechs have been critically affected by COVID-19 and 2 percent severely affected, and by comparison, around 17 percent of other high-growth companies fall into these categories.
Emefiele who said this in a keynote address at the opening ceremony of the 31st Seminar for Finance Correspondents and Business Editors in Enugu, with the theme, “Trends in Nigerian Payments System: Regulating the FinTech Digital Playing Field”, noted that the banking landscape characterized by acceleration in the digitization of financial services which is facilitated by Fintechs, Open banking and emerging new technologies has increasingly evolved.
The CBN Governor who was represented by the Deputy Governor, Corporate Services, Mr. Edward Adamu, pointed out that from all indications, the digital revolution will be a focus for Financial Institutions in the months ahead, therefore making Fintechs a major driver of the industry.
Emefiele further stated that, “The post-COVID economy is predicted to be dominated by certain trends including a radically altered financial industry landscape as the accelerated shift towards digital financial services will attract more fintech investment and encourage competition to traditional financial institutions.
“This calls for an increased and intensive regulatory scrutiny on the part of regulators to proactively monitor developments and ensure the continuous safety and soundness of the financial ecosystem.
“It is therefore imperative that Regulators must keep pace with these exponential developments and leverage new knowledge and technology tools such as Regtech and Suptech to enhance the efficiency and effectiveness of their mandate”, he said.
Furthermore, he stated that technology continues to change the face of the financial services industry, as the advent of digital financial services, for example, has created faster, more efficient, and typically cheaper transactions compared to traditional financial services.
While speaking on the disruptive impact of the Covid-19 pandemic, which he said tested the operational resilience and business continuity strategies of banks, he added that despite the headwinds associated with the pandemic, the banking industry has, however, remained relatively resilient.
This he said, is attested to by the financial indicators with the industry Capital Adequacy Ratio (CAR) and Liquidity Ratio (LR) standing at 15.2% and 41.7%, respectively, at end-July 2021, and are above the prescribed prudential minimum. He added also that the Non-Performing Loan Ratio, which was 5.4% as at the same period, was above the regulatory maximum of 5% by only 40 bps.
“The high level of confidence in our payment system, between 2015 and 2020, has attracted the investment of about $500m in firms run by Nigerian founders.
“In spite of these gains, about 36 percent of adult Nigerians still do not have access to financial services. Improving access to finance for individuals and businesses through digital channels can help to improve financial inclusion, lower the cost of transactions, and increase the flow of credit to businesses”, he disclosed.
Speaking on the Central Bank Digital Currency (CBDC), he noted that with the deployment of the eNaira, Nigerians in remote areas can conduct financial activities using their digital as well as features on phone devices.
While assuring Business editors and finance correspondents of the Bank’s cooperation at all times, he urged them to play a critical role in public sensitization towards the success of the Bank’s reform efforts as outlined in his five-year policy thrust unfolded in 2019.
Earlier in his welcome address, the CBN Enugu Branch Controller, Chiedozie Okonjo, while welcoming participants to Enugu state, said the timing of the seminar couldn’t have come at a better time when digitization has become a global phenomenon.
He called on the Business editors and finance correspondents to play their part in keeping Nigerians informed of the digital innovations of the CBN.
For his part, the Director, Corporate Communications Department, CBN, Osita Nwanisobi in his brief opening remarks, disclosed that the financial system is very sensitive and as the CBN revolutionizes digitization, fraudsters are also working to scuttle the efforts of the CBN.
Nwanisobi while thanking the Journalists for always balancing their stories, expressed the belief that the discussion from the seminar will broaden their understanding of the activities of the CBN