With financial technology companies using innovation and advancement in technology to provide efficient financial services than the traditional banks, the quest for who regulate the fintech between the Central Bank of Nigeria and Nigerian Communication Commission have become a challenge. The founder and Executive Vice Chairman of Computer Warehouse Group, Austin Okere, the largest systems integration company in sub-saharan Africa spoke with SEYE JOSEPH on who should regulate fintech
Can you explain in details what financial technology means?
When people want to talk about fintech they use it very loosely, it is financial technology but what is it about? When the bank started, they were providing services and the services they were providing were difficult for people to access in Nigeria, that is why 60% of people in Nigeria are unbanked, they can’t get banking services. Not because they don’t want to, but when it come to KYC, there is one area that they were not able to scale or they don’t have time to go to the bank. Most of them are market women, they are not poor, they just don’t have time to leave their markets to go and queue at the bank.
Now mobile phones and broadband are connected to the internet, and there is a company that says if the people cannot come to the bank, we should take the bank to the people. Thing like this are called “esusu” or “ajo” People go to the bank to do personal savings for people but it is risky and not regulated. This company in the technology space says that people have smart phones and to have sim card means that the person has done KYC, why don’t we take the bank to them that enable them do financial services? Fintech are technology companies that are providing financial services to people that need the services, that is basically what fintech is.
Why do you think Fintech is getting more prominent in these days?
The reason why fintech has become so prominent is that they are providing services that are solving people’s problems. I can’t remember the last time I went to the bank because from phone or computer, people can do a lot of things, except if they want to do cash in or cash out, they may be tempted to go to the bank. They will rather go to the ATM than going to the bank. The question is where does fintech stand with the bank and the answer is simple if there are banks services that people want and banks are not meeting them, then fintech has roles to play. In Kenya, Mpesa which is the biggest fintech in Africa runs by Safaricom is more or less being regulated by Kenya Communication Commission because it is coming from telecom rather than Kenya Central Bank. This is what Nigeria was worried about and that is why you don’t have telcos led in Nigeria because the regulatory becomes the challenge, who regulate? The banks now collaborate with fintech, for instance, CWG, our company is cooperating with Diamond and MTN are providing Diamond Yellow Account which is bank led on the chain.
What do you think should be people’s reactions to digital currency in this Fintech age?
People have to feel comfortable with digital currency; they need to feel comfortable with account and relationship manager. They need to feel comfortable that the call center they call or the computer they are transacting with is safe, they also need to feel comfortable, they also need to be comfortable that their money in cash, may also be in digital form so cash will not disappear, they are going to be side by side until the balance is more towards one or the other. Before, we used go to the post office to buy stamps, people have stopped buying stamps except for bank duties.
What are the major factors you think will determine the future of banking?
I developed the model called 5 Austin’s model for analyzing the future of bank. They are Customer, Currency, Bank, Fintech and Regulator.
As long as the customers who are the most important are happy with digital currency, the regulator is going to be communication commission because the provider is going to be technology companies providing financial services. People on the other hand prefer the same traditional currency that they have but they are comfortable with digital currency, we are going to continue to have banks and have CBN regulating it.
We are in an age where BIG companies like Facebook, Google, Amazon and others are into providing financial services. Look at what Whataspp did to short messages service, (SMS). Imagine Amazon and Google coming into the financial service, who knows? They may take the big chunk of the sector whereby taking bank businesses and entering into their bank pockets so banks have to decide quickly to become like fintech and provide the services customers needed.
At the time you were starting CWG, do you envisage where your company will be in this age?
We did not. We started as a Dell supplier and support company 25 years ago. What our company has done very well is to learn, relearn, unlearn and learn again. We went from being a company that provides hardware to providing telecom services with VSAT, softwares and started with telephone and internet services software. We went into partnership within faces to provide core banking applications, most banks in Nigeria use our pinnacle core banking application. We went on to provide money services, we went to big companies like MTN and tell them that they don’t need a big IT department, we tell them to sub contract their I.T services to us, we went into cloud services. Because people have dual phones and there is broadband, it gives opportunities for business model you can do before, if you do cloud services, your business will be sitting in the cloud but people can’t use it but today we have softwares that SMES are using for account inventory, they don’t have to buy it, they just sit in the cloud and they pay per use, they don’t have to have a very expensive I.T department and for me it’s a double impact investment because at the end, what you are building an impact to grow people businesses. For us, this is the future; our vision is to be the number one provider of cloud services for Africa.
In the next 25 years, where do you see CWG?
You know when you are driving from to Ibadan, you don’t see Ibadan what you know is that you are going to Ibadan and you will get to Ibadan. If you take a wrong turn, find your way back. CWG in the next 25 years will continue to innovate, to be relevant to customers, to adapt to changes in needs and meet those changes in needs with the technology of the future as it becomes available. CWG is not a rigid company, we are just coming from a hardware company to telecom, software, manage services, if tomorrow artificial intelligence is the way that we can sell our customers by the way to grow technology then that is what we are going to do. We are a company that is always looking for ways to adapt, knowing that change is the only constant in life to innovate and to provide to our customers technology that meet their needs.