Fintech as tool for digital financial services

Financial technology, popularly known as Fintech, is an emerging economic industry that comprises companies that use technology to drive efficient financial services. Granted, some are startups, with just few at the top, but the general impact of these innovative organisations has changed the global payment system, Nigeria inclusive.

McKinsey Global Institute in its latest report, said Digital Financial Services (DFS)- the emerging phase in the quest to deepen financial inclusion, payments system efficiency and transparency, would benefit billions of people, spur inclusive growth by $3.7 trillion to the Gross Domestic Product (GDP) of emerging economies within 10 years.

DFS refers to ways in which basic financial services- payments, savings, loan or insurance products are provided, particularly to the poor, through mobile phones, the Internet and/or electronic cards/payment platforms. These platforms are the outcome of innovative ideas of Fintech.

The Deputy Director, Financial Services, The Bill and Melinda Gates Foundation, Kosta Peric, affirmed the digital payment system, besides enthroning efficiency, will reduce corruption, which is associated with cash payment.

The Treasury Single Account (TSA), pioneered by SystemSpecs, a homegrown technology, has long had the reputation of payment efficiency, particularly the immediate position of government account and detection of “ghost workers.”

The volume of TSA revenue aggregation for government, currently valued at over $30 billion yearly, is not only an example of the potential of Fintech in an economy like Nigeria, but also a reason for accelerated support for existing companies and startups.

The Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, quoting McKinsey, said with improved and consistent adoption of digital financial services in the country’s payment space, no less than $88 billion will be added to Nigeria’s Gross Domestic Product (GDP) by 2025.

The development, he said, will bring about substantial benefits for financial services providers and the economy, apart from boosting financial inclusion level.

Of course, Fintech has come to stay as new phase of global payment system. The only discussion at present is who dominates the innovative space in the years to come and that behooves government and stakeholders to grant necessary support now.

The focus should be on the net effect of its success on the overall economy rather than what the promoter of the technology stands to gain.

Executive Director, SystemSpecs, Deremi Atanda, said the company’s participation in the Gulf Technology Exhibition (GITEX), is an eye opener to its financial technology strength, particularly as a catalyst for economic development.

“Tomorrow’s economy will be built on digital finance as the world looks for alternative and faster ways to achieve inclusive growth, empowering individuals, businesses and governments to carry out cheaper and more effective transactions,” he said.

Nigeria, as one of the emerging economies, must leverage on the opportunities associated with digital financial services’ projection, with KPMG FinTech Report noting that it is fast becoming a dynamic ecosystem bursting at the seams with opportunities for FinTech start-ups.

Currently, less than 50 million people have bank accounts in Nigeria’s population of over 170 million people, 115 million of whom are youthful and use mobile phones for financial transactions.

SystemSpecs’ Remita is one of the handful of the dominant players in Nigeria’s burgeoning FinTech industry.

Remita, among others, has gone beyond basic financial services to impact government finance and national bottom lines massively. These should be recognised and encouraged.