Traditional banks should be worried about fintechs and telecommunication companies granted approval by the Central Bank of Nigeria to operate in the financial market, says the Country Manager for OPay in Nigeria, Iniabasi Akpan.
Akpan, during an interview said banks that don’t seek collaborative ways and are not innovative in their approach will have challenges as the financial market continues to expand.
He said traditional banks, which are not innovative in their operations in the financial market, would not stand a chance against the likes of OPay and other Payment Service Banks (PSBs) being employed by the CBN to drive financial inclusion in Nigeria.
Since the CBN began to seek alternative channels to serve the underbanked population and drive financial inclusion in the country to 80% next year, the spotlight has been on how valuable banks will be to Nigerians years from now.
More financial and payment services that are not bank-led have continued to make their way into the financial market. The latest driver of the tech onslaught against the traditional banks is OPay which is an interconnected system harbouring payment for local canteens, motorcycle (okada), bus drivers and other bills payment, as well as enabling transfer and receiving of funds.
“It’s not just us. The PSBs (payment service banks) are coming. So telcos who are going to hit the market too. So any traditional bank who are thinking it’s going to be business as usual, they have something coming.”
In August 2019, the United States rating agency, Moody’s reported that commercial banks might soon lose their services to the growing popularity of Fintechs firms.
Moody’s said the operation of banks would be affected by Fintechs and Mobile Network Providers due to their lack of infrastructure to rival new web payment solutions.
To back up these projections, some banks are beginning to wind up their brick and mortar operation to respond to the advancement in technology as the need to visit banks begin to dwindle among customers affecting retail banking.
MTN Nigeria has already begun its mobile money service with the launch of MoMo. Airtel has also begun its own mobile money service in other African countries and is reportedly considering establishing the same service in Nigeria.