Communiqué from Ennovators Breakfast Session: Fintech and Banks Best ‘Frenemies’
Ennovators Breakfast Series [EBS] offers opportunities to stakeholders in the industry to network learn, and ignite their passion. This quarterly meeting, usually holds in a relaxed atmosphere where the target audience such as CEOs from fintech firms, IT, Venture Capitalists and the media hobnob and deliberate on salient issues with the view to extending the frontier of knowledge.
With the theme, is Fintech and Banks Best Frenemies, the first quarter edition of EBS sets the tone for the various speakers who will present papers at the cerebral event. Already, global opinion differs on the kind of relationship that exists between the banks and fintech firms. But, some financial technology [FinTech] experts have expressed concern that the banks and fintech would need to work together to grow the banking sector.
Their stand is hinged on the fact that fintech has gradually inched its way into the growth strategies of traditional banks. This has become obvious globally especially in Europe and the US where the surge in fintech and its capability has helped the banks to innovate and develop products to suit customers’ lifestyles.
In Nigeria, the same thread is apparent. Most Nigerian banks are riding high on the wave of fintech products such as USSD, banking apps, etc. Because of this, research has shown that global investment in fintech has reached as high as $80 billion between 2010 and 2016. As such, traditional banks are paying closer attention to how to regain customers’ trust using fintech.Besides, the banks have realised that embracing fintech approach would assist improve their customer uptake.
To demonstrate the seriousness of the banks, one of the banks in Nigeria has branded itself “Fintech” bank. Will this attract customers’ attention? Will it help to drive market share? Will fintech disrupt the banking sector? Or to put it clearly, should banks engage fintechs for competitive advantage? Should banks build, partners or acquire fintech? Are fintech and banks best friends or foes?
The faculty for the session include Yele Okeremi, MD/CEO of Precise Financial Systems; Adedeji Olowe, Executive Director, Systemspecs Limited and Victor Okigbo, Adviser/Consultant on Financial Technology, Access Bank speaking on – How fintech Can Reshape Banking as we know it; Paving the way for a win-win partnership between fintech and banks, who leads? and How should banks respond to fintech growths and threats? respectively.
The session moderated by Emmanuel Agha – MD/CEO, Innovectives observed among others that the line between being a friend and enemy is not defined among the banks and fintech; Banking operation is a fallout of the infallibility of technology; Fintech firms are creating what the customers want in the non-banking areas and taking it to the banks and Fintech firms can disrupt the banking landscape.
It also noted the following: Technology has led the way in respect to how the banks operate. That is what brought computerized banking and online fund transfer; The gap between the banks and the customers is so huge. Fintech will fill that gap. Even non-banking companies are also coming into that space; Soon, some basic things that are important to customers would be sacrosanct just like the air-conditioner in a banking hall and that the USSD platform kicked off in 2014. In 2017, all the banks are offering USSD as a service. That is because customers are migrating to banks with the USSD platform.
Other highlights thrown up at the seesion claims Fintech cannot survive the onslaught of the established financial institutions and the regulation. The customers will win from the onslaught; The customers do not want banks. The customers want banking services; The regulator does not make it easy for banks to invest in none banking venture and the banks are developing banking technology that would enable the customers to get better service without human interface.
The communique signed by Sola Fanawopo – Event Director, EBS noted the following as key resolutions for March EBS:
- New technologies are impacting the way the banks view and reach out to customers. What has made this happen is fintech. Therefore, the only way to deepen the customer relationship is for banks to collaborate with fintech.
- There is a future of collaboration between banks and fintech.
- There is a need to cooperate massively with fintech on a level the banks have not done before. That is what the banks want. This is what the customers want.
- The banks are looking for ways to collaborate with fintech. Banks want to hold open discussion with startups and meet them at the point of their needs.
- The banks need to court the fintechs.
- If there is no clear collaboration between the banks and fintech firms, the banks will cease to exist, as we know it.
- Collaboration between the banks and fintech is a necessity.