By RARZACK OLAEGBE
Have you witnessed a silent revolution? No. Not the end-SARS kind of revolution. Some revolutions are bloody. Do you know what I mean? Others are bloodless. Some are loud. Others are quiet. No Weapon of Mass Destruction involved. The only known weapon is the quiet hum of the technology. Like the ongoing, unending, silent banking revolution.
The banking sector is under unending, silent reconstruction, thanks to Fintech. For instance, to deliver financial services to customers, fintech firms are deploying cutting-edge technologies: artificial intelligence, blockchain, cloud computing, big data analytics, and virtual reality.
On the one hand
Call it disruption. This disruption has challenged the banking model as we know it. The banks were the leaders in the financial ecosystem in the 1980s and 90s. Not anymore. Nimble and agile fintech start-ups have covered the payments, lending, wealth management, and insurance spaces. Do you know what this has brought to the banking public? Options. Choices. Opportunities.
On the other hand
Fintech services have also created competition for the banks. The impact of fintech has reshaped customers’ expectations. Fintech has brought to the fore: Quick funds transfer. User-friendly digital experiences. Nil customer service. Nil branch. The influence of fintech has extended to the lending and credit space. But the bank managers are not lying dormant.
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In the long term
As Dr Kayode Adeyemi, a banker, and member of the Nigeria Institute of Management and the Nigeria Institute of Risk and Credit Management, noted in his educative write up titled ‘’Fintech Influences Traditional Banking’’, despite the disruption fintech has caused, the banks still hold considerable advantages that ensure their continued relevance in the financial sector.
According to him, the banks possess the expertise and infrastructure to navigate complex legal environments. Namely, anti-money laundering protocols. Capital requirements. Many fintech start-ups are struggling to overcome these barriers. He established that banks benefit from established customer trust and brand recognition. These are critical factors in a sector where security and reliability are paramount. Many customers, he averred, preferred to keep their core financial assets with institutions that offer stability.
Yes, stability. The banks offer stability. This arises from keeping funds from generation to generation. Banking in Nigeria is over a century old. Fintech is a baby. It is still in its infancy. In terms of competition, fintech cannot step up to the banks. Yes, the banks have an edge over fintech in this space. Yes, banks are increasingly adopting a hybrid strategy. Dr Adeyemi said that the banks are integrating fintech innovations within their frameworks while leveraging their regulatory expertise and customer base to maintain a competitive edge. Dr Adeyemi said fintech and the banks would become collaborators and co-creators. Not competitors.
In the short term
Then the revolution will become intense.
*Olaegbe ([email protected])
