NDIC, CBN Battle Safety Issues In Nigeria’s Fintech Environment

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The Deposit Insurance Corporation (NDIC) yesterday said will adopt financial technology (fintech) solutions and tools to modernize its data collection and analysis processes amidst emerging safety issues surrounding of technology the ’s financial system.

Director/Chief Executive Officer, NDIC, Ibrahim Umaru, disclosed this while delivering the keynote address at the seminar for Finance Correspondents and Editors Kaduna.

Noting that there is increasing evidence that Fintech innovations have many advantages for businesses and customers, including enhancing competition and financial inclusion, Umaru said that NDIC has some concerns about fintechs.

He however added that spite of these concerns the Corporation will leverage on fintech tools to modernise its data collection and analysis.

He said: “Financial system increases the volatility of asset prices and investor behaviour, leading to deteriorating credit conditions, increased costs to firms and households and potentially the collapse of the payment system. There is increasing evidence that Fintech innovations have many advantages for businesses and customers. The World Forum, 2017, suggests Fintech is “disruptive”, “revolutionary”, and armed “digital ”, that will “tear down” traditional financial institutions.”

According to him, though, “Fintech will enhance competition and financial inclusion, however, the increasing sophistication and proliferation of technology in banking operations also ushered in unintended consequences like operational and legal risks, as well as the security of consumer personal data. The recent experiences of technology giants selling consumer data without consent or authority is a cause for concern.”

Umaru disclosed that the risks associated emerging technology without stifling innovation has become a major theme amongst regulators and policy makers.

Consequently, he stated: “In for instance, the Central Bank recently released a draft framework for regulatory sandbox operations to encourage innovation, especially for Startups. The NDIC equally established an ‘Innovation and Fintech Unit’ to drive its agenda for emerging technology and solutions to improve the safety of depositors and the banking system.”