Last month, after a prolonged hiatus due to COVID-19, DAI Magister, in partnership with DAI Nigeria, held its first Development Matters roundtable since the pandemic began. We were fortunate to host to several prominent constituents from Nigeria’s fintech ecosystem to discuss the direction of financial regulations and the potential impacts on the sector.

Aishah Ahmad, Deputy Governor of the Central Bank of Nigeria’s Financial Systems Stability Directorate, delivered the keynote address. In her speech, the Deputy Governor charted the evolution from brick-and-mortar financial institutions to the rise of digital banking in Nigeria. She highlighted the critical role of technology adoption in banking development.

She remarked on how the vision of a cashless economy has led to forward-thinking guidelines and frameworks in several areas such as card regulations, internet/mobile banking, USSD funds transfer, and cryptocurrencies.

Aishah also shared the Central Bank of Nigeria’s approach to regulation as an example of how a visionary regulator can develop a market and discussed some of the organisation’s constraints. She encouraged fintech operators to use platforms like the DAI Roundtable for collaborative engagement to help regulators become more responsive to market and operating realities.

The roundtable was convened by Dr. Joe Abah, DAI Nigeria Country Director, and moderated by Victor Basta, CEO of DAI Magister. Panelists included Winston Osuchukwu, SVP Distribution at Migo, Olufemi Sojinrin, CIO at NIBBS, Ayodele Adeyemi-Faboya, Partner at Banwo & Ighodalo, and Musa Itopa Jimoh, Director of Payments at the Central Bank of Nigeria. Discussions focused on the following critical lines of inquiry:

Expanding regulations to other entities

The need for more regulations for other entities such as commercial and microfinance banks, bureaux- de-change, development finance institutions, and mobile operators. How have regulations evolved to cater to new innovations, and what are the current challenges?

Challenges serving the unbanked market

Delivering banking services to the unbanked has become a core tenet of many emerging market regulators. Yet many fintechs find it unprofitable to address this market and face significant scalability challenges. How does the regulatory environment balance these realities with objectives to serve the unbanked?

Keeping pace with innovation

Keeping up with Nigeria’s rapidly growing fintech sector challenges regulators. How has the regulatory approach or regime aimed to evolve to ‘keep pace’? Where has it succeeded most, and where are regulations falling behind? Are there any current best practice models or approaches that can be used for Nigeria’s financial industry in the future?

Regulatory impacts of COVID-19

COVID has rapidly transformed many areas of fintech. What have been the most pressing COVID-related regulatory issues in Nigeria? How have fintechs and regulations evolved differently as a result?

Views and approaches to regulations

Fintech companies vary significantly in how they view regulations and engage with regulators. Where are fintech companies falling short, and what are they doing well? What practical advice do they need to successfully interact with the regulators?

Several key themes emerged from the roundtable discussions:

  • Regulation in Nigeria is highly developed and a leader on the African continent. This has contributed to creating rapid growth in the fintech sector.
  • The power of technology and innovative fintechs to scale solutions related to inter-continent trade, financial inclusion, and remittances are undeniable.
  • The pandemic demonstrated how digital financial services are essential for preserving resilience and inclusion.
  • Regulators need to be more prescriptive about what licenses are required for fintechs operating in Nigeria. This requires a deeper understanding of the rapidly changing ecosystem through increased engagement and research studies. The Central Bank of Nigeria is working with the SEC to harmonize their regulations where there are similarities.
  • Challenges for regulators are related to the fragmented nature of fintech services. Future regulation should cover operational resilience, data privacy, and cybersecurity.
  • The Central Bank of Nigeria is committed to promoting fintech and providing the appropriate regulatory backing. However, any transactions or payment infrastructure that doesn’t have visibility poses a threat, as with cryptocurrency. However, there is scope for the regulator to better understand crypto and identify a means to provide safeguards.
  • Fintechs should continue to deepen engagement, learning, and the move towards more self-regulation, feedback to the regulator, and fostering a symbiotic relationship with The Central Bank of Nigeria.
  • Platforms for engagement between the regulator and regulated entities are available. Still, those platforms need to be refreshed in terms of membership, resources, and energy.

We’re excited to continue our involvement in Nigeria’s burgeoning fintech ecosystem and exploring the key regulatory issues impacting the sector. In addition, we hope to continue our deep engagement among constituents with further events in the year.

Find out more about us.



Say Hello