‘Comprehensively!’ Fintech, risks require thorough grasp, CBN says

The Central Bank of Nigeria (CBN) has emphasized that it requires a comprehensive understanding of Fintechs and the risks they bring, particularly in terms of data security.

Mustapha Haruna, Director of the CBN’s Banking Supervision Department, made the announcement in the presence of Assistant Director Adekunle Adeniji.

According to statistics, foreign direct investments accounted for 55.7 percent of total capital investment in the fintech industry, while domestic investments accounted for 43 percent.

“As we enroll fintechs into financial services, we need to have a proper knowledge of the technological businesses and the risks they pose; and then we need to effectively manage these threats,” he said.

“While we may not be able to completely eradicate these concerns, we must ensure that the risks to consumers and financial institutions, as well as the financial system and its stability, are as low as possible.”

“Authorities must also ensure that regulated government entities, as well as relevant government structures, identify and manage any risks associated with the use of these activities,” he said.

Another reason CBN needs to keep an eye on Fintechs, according to Haruna, was the tremendous market value in its operations around the world.

“By next year, the worldwide market value of fintech companies is expected to reach roughly $310 billion dollars,” he stated.

According to the Nigerian Fintech Census 2020, conducted by Ernst & Young, fintechs in Nigeria will have raised more than 439 million dollars to promote the sector by the end of 2020.

This, he says, highlights the sector’s relevance in financial services, as well as inclusivity and what we do.

He stressed the importance of the bank keeping an eye on this sector in order to maintain the financial system’s safety and stability.

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