CBN Tasks Financial Institutions On Technology

MR Godwin Emefiele, Governor, Central Bank of Nigeria (CBN), has urged financial institutions to leverage new knowledge and technology tools to enhance the efficiency and effectiveness of Nigerian payment system.

Emefiele, who gave the advice at the 31st Seminar for Finance Correspondents and Business Editors, on Wednesday in Enugu, noted that the robust payment system had continued to evolve toward meeting the needs of households and businesses in Nigeria.

According to him, the high level of confidence in the country’s payment system, between 2015 and 2020, had attracted the investment of about $500m in firms run by Nigerian founders.

In his words, “In spite of these gains, about 36 per cent of adult Nigerians still do not have access to financial services.”

“Improving access to finance for individuals and businesses through digital channels can help to improve financial inclusion, lower the cost of transactions, and increase the flow of credit to businesses.”

Emefiele, represented by the Deputy Governor, Corporate Services Directorate, Mr Edward Adamu, noted also that the post-COVID economy was predicted to be dominated by certain trends including a radically altered financial industry landscape.

He said the accelerated shift towards digital financial services would attract more fintech investment and encourage competition to traditional financial institutions.

“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.” He added.

“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.”

The CBN Governor who further said digital revolution would be a focus for Financial Institutions in the months ahead, therefore, making Fintechs a major driver of the industry, explained that technology had continued to change the face of the financial services industry.

He said the advent of digital financial services, for example, had created faster, more efficient, and typically cheaper transactions compared to traditional financial services.

“Over the past 14 years, the Nigerian payment system has evolved significantly with extensive technological development backed by deliberate enabling regulation by the CBN.

“This has, no doubt, accelerated the development of novel financial products, services and channels all of which have placed Nigeria at the fore of the financial innovation race”.

Emefiele also explained that the apex bank’s decision to introduce a central bank digital currency, the eNaira, was to help attain its goals of fostering greater inclusion using digital channels, supporting cross border payments for businesses and firms as well as providing a reliable channel for remittances inflows into the country.

Emefiele said with the deployment of the eNaira, Nigerians in remote areas could conduct financial activities using their digital as well as features on phone devices.

He, therefore, expressed the belief that partnering with stakeholders in the financial industry, more Nigerians would be financially included.

The theme of the meeting was “Trends in Nigerian Payments System: Regulating the Fintech Digital playing Field.”