First Bank of Nigeria has pledged continued support for startups and innovators in the fintech ecosystem by providing relevant data and infrastructure to enable them scale appropriately.
FirstBank’s Managing Director, Dr Adesola Adeduntan, made the promise at the bank’s FinTech Summit 5.0, on Thursday in Lagos.
The summit, which is the fifth in its series had the theme: “Open Banking and Its Derivatives Opportunities in the Financial Ecosystem”.
Adeduntan said that the summit was organised to create a global platform for brainstorming on the future of innovation in the financial services sector and specifically in the financial technology space.
The FirstBank boss said that part of the objectives of the summit was to contribute to the rapid evolution in the banking and financial services delivery.
“The summit gives us a very good platform to hear from leading experts in the space because open data, cloud technology, artificial intelligence and the way they operate together to create the right environment for innovation or evolution, is becoming important.
“For us, open banking demonstrates the practical fussion of these variables, presenting potential that can redefine product development, customer experience and overall value creation within the financial services system with significant multiplier effect, not just for players but also for consumers of financial services products.
“The regulatory framework for open banking in Nigeria, as issued by the Central Bank of Nigeria on the rules and regulations which financial services can take place across the system,” he said.
Adeduntan stressed that NITDA and the data protection regulations were indications of regulation around Open Banking.
“We believe there is enough space for continuous innovation and for us as an economy, to rapidly embrace this in the bid to materially upgrading the quality of financial services in Nigeria.
“As an institution that is over 127 years old, our bank has series of industrial transformation and would continue to play a leading role in forging the conversations on refining regulatory frameworks and shaping the industry not just for open banking but for all contemporary issues to back our industry.
“We will also continue to demonstrate our support for start-ups and innovators in the Fintech space by providing them with relevant data, support and infrastructure to enable them scale appropriately, through our SMEConnect platform,” he noted.
The keynote speaker, Prof. Ndubuisi Ekekwe, the Lead Faculty of Tekedia Institute, delivered a paper on: Open Banking: The Grand Unification of Application Utility Age.
According to Ekekwe, Open Banking is a mechanics where banks are required to share their market data through API’s, which are third party companies to help drive innovation.
He recalled the friction during the evolution of the financial systems and how FirstBank had broken the friction of individuals who had money to lend and the individuals who were seeking to borrow.
Prof Ekekwe noted that through APIs, different companies would have access to customers and if that was done, the frictions would be reduced across the nation.
He stated that the move would also provide the opportunity on how to deal and offer services to the customers, adding that it would also be a great moment for the country.
He called for the development of the credit system to grow the economy, noting that open banking could create the credit architecture to help individuals rise in the economic ecosystem.
“Open Banking offers us a very important toll, it makes it possible for you to share customer data as a bank with trusted third-parties through APIs without any form of violation of privacy or risks.
“It gives retail customers the opportunity that their data can be aggregated and with analytic system, you can have an insight of what is happening within your banking experience.
“There will not be a catalytic evolution in Nigeria’s economic architecture without a credit system, which is urgently needed for us to have the opportunity of expanding our economy.
“It is not a question for us that we need money before you can get a house or a car in some climes, you can buy a car and pay over seven years or a house and pay over 35 years but in Nigeria, you pay 100 per cent to have house or a car and this has cut many of our citizens out of owning a property.
“I believe that open banking through data aggregation and analytic system can also bring a national credit architecture that will make it possible for everyone of us to rise and imagine every person with a BVN will have a credit score,” Ekekwe said.
The Deputy Director, Payment System of the CBN, Mr Musa Jimoh, represented by Mr Olubukola Akinwunmi of the CBN said that the framework looked specifically around the risk management that needed to be built.
Jimoh noted: “Eventually, when we go full blast open banking regime, we take care of the main concerns of customers. One of the main aspects of the open banking regime is the registry.
“The current framework has already indicated that the bank will be engaging the industry stakeholders to come up with defined guidelines on how a number of the positions of the framework will be translated into operations.
“Which is the Open Banking registry which will ensure transparency and ensure that customers can look up and know who they are dealing with,” he added.