Banks Must Reform to Survive Fintech Revolution — Osinbajo

Fintech Revolution

The Vice-President, Prof. Yemi Osinbajo, yesterday, said Nigerian banks need to reform to survive the up-spring of financial technology companies (Fintechs).

Fintechs are companies that use technology to replace or enhance the usage of financial services provided by conventional financial institutions or banks. Speaking at the ongoing Africa Investment Forum (AIF) in Johannesburg, South Africa, Osinbajo said although Fintechs are not about to take over from the banks, the banks have to reform to survive the encroachment into the hitherto exclusive business of banks by the fintechs.

He stated: “Fintech companies, as you know, are challenging some of the old laws on banking and all of that. The major issue is that technology is clearly going to disrupt the financial space, and is doing so already, so banks have to reform.

“They have to invest in some of the Fintech companies themselves, and they have to see this revolution as inevitable. I think that what we are seeing today is the reform around that space, and many of the banks are looking up and understanding that this is going to happen, and it’s already happening.

The vice president however allayed the fears of the banks, assuring that the government will continue to work with the banks, the regulators and the Fintech companies to ensure development in the sector. “I think the first thing is to allay the fears of the banks that lunch isn’t being taken away.

Banks, of course, are jittery about some of what is happening in the Fintech space. They need to be assured that this isn’t about taking their lunch but that we cannot avoid what is coming to us now. “What we are saying is that payment system, lending, all sort of financial systems, even insurance are happening much faster.”