One of the great challenges facing the developing world today is how to provide banking infrastructure to these countries. One of the greatest developments that technology has allowed is to allow greater access to the unbanked.
Perhaps remarkably, over 65% of those in Nigeria remain unbanked, according to Nadu Denloye, the co-founder of Telnet Nigeria. The repercussions of being unbanked are myriad and dire. In other words, to have no access to professional financial services means not only a lack of access to ATMs and checking accounts. That may be true, but perhaps more importantly, it means no access to insurance, pensions, financial planning, investments, interest-accruing accounts, and perhaps most importantly, personal or small-business loans.
According to Denloye, one of the major things holding people back in Nigeria is actually the attitude toward banking. She notes that among those who successfully find their way into the world of professional financial services–even as far as opening an account or a pension–tends to be the attitude that they can do it and that this is a service for them.
Denloye also notes that women in particular suffer from the idea that the world of these professional services is something that they either don’t have the right to or have inappropriate access to.
However, the emergence of smartphones, wireless internet, 4G and 5G, and other technologies has positively disrupted this market. To wit, the availability of new technologies and new modes of access to financial instruments–the core mission of the Fintech space–have inspired a swell of interest in the financial space, particularly among those who might otherwise have thought that they would never have such access.
According to Denloye, it is crucial for traditional bankers to understand how their space is being disrupted by the emerging Fintech market and to find ways to work with or alongside this market. Given modern Fintech’s ability to create interest among those who might otherwise not engage with the normal financial world, it provides a bold new frontier for traditional and non-traditional financial instruments.
This is a vital time to understand how younger people whose interest in technology might lead them into a better fluency with the financial world can be reached through Fintech initiatives and smarter use of technology by traditional financial institutions.
Significant amounts of foreign investment are fuelling the Fintech boom in Africa, including notable projects in South Africa and Kenya as well as Nigeria. Big things are happening in this space, and we’ll be seeing how it plays out very soon.