Nigerian Exchange Limited (NGX) has said that the collaboration between FinTech and the capital market will effectively create a digital economy as well as increase financial inclusion and cashless payments.
The Chief Executive Officer, NGX, ably represented by the Divisional Head, Trading Business at NGX, Jude Chiemeka, stated this during the 2021 Chartered Institute of Stockbrokers National Workshop which held in Abuja recently.
Speaking on the theme; Roadmap to a Digital Nigeria: Harnessing Fintech, Cryptocurrencies and Artificial Intelligence to Create Stronger Financial Markets, Chiemeka explained that Fintechs have a huge potential to transform the capital markets and effectively build a digital economy.
He added that rather than seeing fintechs as competitors, they are potential partners to incumbent Capital Market Infrastructure Providers like NGX.
Citing the Pulse of FinTech H2 2020 report, Chiemeka said that the global investments by fintechs was $105 billion despite a significant drop compared to $165 billion recorded in 2019 while adding that Nigerian Fintechs raised about $439 million in 2020.
According to him, Fintechs are transforming the financial services industry by focusing on targeted products and services, automating and commoditising high margin process, strategic use of data and collaborating with incumbents.
Chiemeka noted that the NGX provides access to capital, trade execution, post trade services, data analytics and information services, operations and technology and added that NGX is not left out of the FinTech adoption as it continues to adopt technology to improve market accessibility and transparency.
He said, “As Africa’s largest economy and with a population of 200 million—40 per cent of which is financially excluded, Nigeria is classified as a developing FinTech economy compared to its more mature global peers such as the UK, Singapore, Australia, Sweden and India.
EY estimates that Nigerian FinTech revenues will reach $543 million by 2022, driven by increasing smartphone penetration, unbanked populations and a focused regulatory drive to increase financial inclusion and cashless payments.
In line with the evolution of FinTech in other markets, FinTech activity in Nigeria started in payments and moved into other areas. consumer lending—and, increasingly, asset management—are focal points for FinTech activity”.
Chiemeka thereafter reiterated that NGX will continue to set up its solutions and innovation hub to explore projects that leverage distributed ledgers, cryptocurrency and artificial intelligence to improve financial inclusion and market accessibility.