The Central Bank of Nigeria (CBN) has announced that it is developing a new law designed to raise the bar for corporate governance and compliance among fintech companies operating in the nation.
At the FITC Fintech (TechNnovation) Conference on Thursday in Lagos, Mr Philip Ikeazor, the Deputy Governor of Financial Systems Stability at CBN, revealed this.
He asserted that the new law is essential to reducing the dangers associated with the digital age.
In his keynote speech, “Building Trust in the Digital Age: Balancing Performance with Compliance,” the speaker stated that millions of Nigerians now have easier access to financial services, which has increased financial inclusion and convenience.
On the other hand, he claimed that if digitalization is not handled correctly, it can potentially provide difficulties that could erode trust.
He claims that problems like digital fraud, data breaches, and cybersecurity threats are ongoing worries that have the potential to undermine user trust in the system.
Reducing the dangers
Ikeazor claimed that the CBN has been leading this revolution in risk management, enacting laws that support creativity while safeguarding the integrity and stability of the financial system.
“To further improve performance and compliance, the central bank is developing a new regulation in addition to the ones that are already in place. The two main topics of discussion here will be licensing regulations and corporate governance.”
“Every organization should follow all applicable laws and regulations when conducting its commercial operations. The compliance function must be viewed as critically crucial by financial institutions.”
“Corporate governance is also important. In order to effectively manage their affairs, organisations must be open, accountable, and have the proper organizational structure. This is the era of compliance, and you’re going to see really powerful and dissuasive fines, especially now that you look at the regulator’s body language,” he added.
FinTech Revolution
The Chief Convener and Chief Executive Officer of FITC, Mrs. Chizor Malize, stated in her introductory remarks that the rise of fintech has transformed financial services, causing consumer behavior to move globally away from traditional brick-and-mortar enterprises and towards digital consumption.
She claims that the emergence of businesses like Square and PayPal, along with technological advancements like blockchain and mobile payment apps like Apple Pay and Google Wallet, has shown how much fintech can do to upend established banking practices and improve customer convenience.
She said that although Interswitch, Flutterwave, Moniepoint, and other African companies are leading the way in this fintech revolution, Nigerian banks like Providus Bank, GTBank, and Stanbic IBTC are also adopting fintech innovations to keep up with changing customer needs.
“These projects highlight how Africa may use digital innovation to promote financial inclusion and economic growth. The fintech revolution in Africa has been greatly aided by these platforms, which have revolutionized digital payments, financial inclusion, and banking services through widespread adoption of mobile technology and rising demand for financial services.”
“The conference’s subject, “Building Trust in the Digital Age: Balancing Performance with Compliance,” effectively conveys the conflict we must contend with. Any financial system is built on trust, and in this day of fast technological innovation, upholding that trust is more important than ever.”
“We must maintain the greatest standards of ethics and compliance as we work towards achieving peak performance and efficiency. This conference is focused on the importance of strong regulation and compliance in maintaining the stability of the financial system. Innovation, transformation, and growth all depend on knowledge intervention and education, the speaker stated.
The CBN, the Nigeria Deposit Insurance Corporation (NDIC), and all Nigerian banks with licenses are members of the FITC, a non-profit professional association.
