Either you are ready or not, the innovation and the speed at which technology is transforming the world is unpredictable. Close your eyes now and open it now, don’t ever think what you see when you closed your eyes is what you are seeing now. Everything has totally changed and it will continue to change.
An important sector that is being affected and still experiencing total change of financial technology is the financial institution. The industry that is responsible for financial transactions that include investments, loans, deposits and financial advisory.
Almost everyone deals with financial institutions on a regular basis, from depositing money to taking out loans and exchanging currencies must be done through financial institutions. Before technology started transforming banking processes in Africa, banks customers used to take tallies to know if they will be attended to on that particular day, loan applications and processes was not an easy task to come by as the application is attached with many bottlenecks and conditions.
Explaining why digital lending, an aspect of financial technology will take the place of traditional means of accessing bank loans, the Co-founder of Kiakia, Olajide Abiola, an online digital lending platform said that traditional banks aren’t doing everything right when it comes to giving loans.
Abiola said that banks have never considered it a priority or something of importance to lend to the real sectors.
“They are averse to leveraging on research and technology to design and develop solutions peculiar to the Nigerian consumer and environment with a view to engendering financial inclusion, addressing the issue of under-banking as never been considered one of priority, the out obsession with foreign innovation has robbed the banks the opportunity of looking inwards to find solutions”
“They don’t just care about their customers don’t know how to utilize data and new technologies and too rigid and stuck in their old ways to explore new paths”, he said.
He cited the examples of Asia and Europe where traditional institutions have since jumped on the financial technology movement and even financing investments, researches, developments and innovations, “here in Nigeria and across Africa, they are still just trying to understand the concept. Just imagine that European Banks are even sponsoring the promotion of fintech services in Africa ahead of most African banks”, he retorted.
Will digital lending drive traditional means of getting loans away? Abiola said no. “With the likes of Zopas, Lending Circle and Ratesetter across Europe and America who have processed Billions of dollars and Pounds in loans disbursements to individuals and small businesses, the traditional banks have not ceased to grow”
He mentioned that traditional banking and financial technology are already at a crossroad of intersection.
“Many traditional institutions are already partnering with fintech companies now with the aim of delivering digital banking. They too want to capture hitherto unexplored markets and opportunities”
He again mentioned the service they are rendering to their customers, “90% of KiaKia customers have never accessed a loan from any traditional financial institutions in their life and do not even have credit score. So, you can see the power of fintech”
“Without KiaKia, these people may never be able to access loans because these traditional banks will never lend them. There is no basis for threat because fintech won’t eat their lunch, it will only create a buffet of services that they do not provide”, he said.
On what digital lending in Africa will become, Abiola said that it will become the norm like the use of ATM cards with technology changing the frontiers of digital banking.
“One of the goals for us is to be the first digital bank in Nigeria, just like what WEBANK in China has achieved. We want Nigerians and Africans to be able to experience end to end banking services from their internet enabled devices, specifically from their mobile phones. This is already possible if the regulators will do the needful and be proactive”, mentioned.