Stakeholders in the information and communications technology and financial technology have tasked regulatory institutions in the sectors on providing appropriate regulatory framework for technological disruption of traditional ways of services in the country.
They urged Central Bank of Nigeria (CBN) and Nigerian Communications Commission (NCC) to rise to the task of providing the much needed regulatory framework required for Nigerians to benefit from the waves of technological disruption of banking services among others occasioned by mobile phone based services.
This is coming against the backdrop of emergence of FinTech startups providing banking services through smartphones as well as CBN outright rejection of crypto currency in the country instead of looking at the regulation.
Tilman Ehrbeck, partner at Omidyar Network – a venture capital firm supporting Financial Technology companies such as Paga, Flutterwaves, Andela among others, told National Daily that technology is changing which allows very new things to happen, that has a lot to do with the spread of mobile phones.
“Increasingly, people have smartphones and they can connect in a number of ways and doing a number of things which previously wouldn’t have been feasible.
“So, technology is disrupting our life in general. The way we book travel, the way we take taxi, the way we do all sort of things, technology is disrupting that. It has also created opportunities to modernize financial services.
“Regulators have a number of objectives in the financial system that they have to keep in mind. They want the financial system to be stable, they can’t afford instability, distrust into the system after all,” he said.
He added that regulators have inclusive objectives. “They want to deepen the system by bringing so many people onboard as much as possible; as well as integrity of the financial system. They don’t want it to be used for money laundering or to finance terrorism and they want to protect consumers. So, regulators have a number of objectives sometimes they try to harness benefits of technology led innovation while minimizing the risk. That is a very difficult job all regulators in all countries are wrestling with.
“Regulators have to find the right balance and the right balance depends on the situation in the country, health of the financial system. It is a policy balancing act that allows technology to be harnessed to increase stability, to deepen the system to improve integrity and to protect the consumers, while minimizing the new risk that might occur.
Tayo Oviosu, chief executive officer, Paga, said that It is unfortunate that Central Bank out rightly rejected cryptocurrency.
“The future is digital and the future is going to be cryptocurrency. I think one day the Nigerian naira will be crypto-naira. It is going to be a far time in the future but it is going to happen one day.
“I believe the central bank will embrace it and try to understand this technology. I believe it will happen over time.
“One of the good things coming from the central bank is regulatory sandbox that allows for innovation to come to central bank in areas where they don’t have regulation and that will spur more innovation and I applaud the central bank for taking that step.
“It is the first step in getting into cryptocurrency. It is good thing for institutions to start thinking of these things,” he added.
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