The Central Bank of Nigeria (CBN), Governor, Mr. Godwin Emefiele Wednesday in Enugu said that with the deployment of the eNaira, Nigerians in remote areas can conduct financial activities using their digital as well as features on phone devices.
Emefiele also said that with the deployment of the eNaira, Nigeria will soon be the hub of payments systems in Africa as the country is progressing in advancing the boundaries of the payments system.
He said that the digital revolution will be a focus for financial institutions in the months ahead, making Fintechs a major driver of the industry, stressing that technology continues to change the face of the financial services industry.
In his keynote address at the ongoing Seminar for Finance Correspondents and Business Editors holding in Enugu, with the theme: ‘Trends in Nigerian Payments System: Regulating The Fintech Digital Playing Field’, Emefiele noted that studies have already shown that only 1 per cent of FinTechs have been critically affected by COVID-19 and 2 per cent severely affected.
Emefiele who was represented by the Deputy Governor, Corporate Services, Mr. Edward Lametek Adamu stated that the International Monetary Fund (IMF) estimated the global economic cost of the COVID-19 pandemic at $28 trillion in lost output.
He said, “It is therefore unsurprising that many FinTechs have experienced a surge in demand as working practices and customer banking habits changed. As a country with one of the largest millennial populations in the world- (an estimated 62per cent of the Nigerian population below 25 years of age), fast Smartphone growth driven by increasing affordability, Increasing mobile penetration, and fast transition to 5G technology, Nigeria remains primed to be an active playground for digital transformation and cannot afford to ignore the Fintech challenge.
“The advent of digital financial services, for example, has created faster, more efficient, and typically cheaper transactions compared to traditional financial services. As the global economy recovers from COVID-19, it is obvious that FinTech will play a more important role towards resilient and sustainable recovery,” he said.
Emefiele equally noted that the high level of confidence in the nation’s payment system, between 2015 and 2020, has attracted the investment of about $500 million in firms run by Nigerian founders.
According to him, the theme was timely, adding that the unveiling of the Central Bank Digital Currency (CBDC), the eNaira, makes Nigeria one of the first countries in Africa, and indeed the globe, to adopt the digitization of its national currency.
“It is noteworthy that the International Monetary Fund (IMF) estimated the global economic cost of the COVID-19 pandemic at $28 trillion in lost output. In a bid to address the fallouts of the pandemic, authorities all over the world have implemented extraordinary policy measures to ease financial stability risks and we were not an exception” he said.
He further noted that it is imperative that regulators must keep pace with the exponential developments in the payment systems ecosystem and leverage new knowledge and technology tools such as Regtech and Suptech to enhance the efficiency and effectiveness of their mandate.
Speaking further, he maintained that Post-COVID economy is predicted to be dominated by certain trends including a radically altered financial industry landscape as the accelerated shift towards digital financial services will attract more fintech investment and encourage competition to traditional financial institutions.
He said, “This calls for an Increased and intensive regulatory scrutiny on the part of regulators to proactively monitor developments and ensure the continuous safety and soundness of the financial ecosystem.
“It is therefore imperative that Regulators must keep pace with these exponential developments and leverage new knowledge and technology tools such as Regtech and Suptech to enhance the efficiency and effectiveness of their mandate,” he said.
Earlier in his welcome address, Enugu Branch Controller of CBN, Mr. Chiedozie Okonjo, lauded the management of the apex bank for choosing the theme which he described as apt and timely in view of an increasingly evolving banking landscape characterized by the acceleration in the digitalization of financial services which is facilitated by Fintechs, Open banking and emerging new technologies.