Fintech companies tasked on regulatory compliance

Financial Technology (fintech) companies have been urged to see regulations as key to deepening the sector’s growth.

They have also been reminded that compliance to rules is also important in deepening their contributions to the economy.

The positions were made at a forum themed, ‘Regulatory Compliance and Governance: A Catalyst for Fintech Innovation’, jointly hosted by the Chartered Institute of Bankers of Nigeria (CIBN), The Nest, The Trusted Advisors and the Fintech CEO Forum, which held at The Nest technology hub in Lagos.

Discussants noted that there is no gainsaying the fact that today, Nigeria’s fintech sector has experienced rapid growth, with new products being introduced at unprecedented rates. They stressed that fintech sector could be an important catalyst for further economic development, financial inclusion, innovation, and international investment in Nigeria, but submitted that regulation and compliance are key elements to sustaining the tempo.

Noteworthy was the shared acknowledgment that government and regulators play a pivotal role in steering Nigeria’s Fintech sector towards success. Integral initiatives, such as the regulatory sandbox and the development of the NFS by the Central Bank of Nigeria, stand testament to the commitment to a balanced ecosystem.

Leading the discourse, Registrar/Chief Executive, CIBN, Akin Morakinyo, summarised the shift from competition to co-opetition, emphasising the need for collaborative problem-solving to fuel progress. He highlighted the importance of mentorship, urging Fintechs to seek knowledge and guidance.

The value of compliance, presented as the cornerstone of responsible innovation, was championed by Managing Partner of The Trusted Advisor, Taye Awofiranye.

He underscored that regulations define the boundaries within which Fintechs thrive, ensuring growth through adherence. Awofiranye added that regulation is the box in which they are kept, “it can inhibit growth or otherwise, depending on understanding and compliance.”

Prominent voices echoed the sentiment that regulations should empower rather than hinder innovation. Collaboration emerged as a prevailing theme, with President of the Fintech CEOs Forum, Olaoluwa Awojoodu, emphasizing that partnerships are intrinsic to Fintech progress.

Stressing the importance of regulation, CEO, of Bankly, Tomilola Majekodunmi, said Fintechs should have an active board, noting that regulations help protect from losses and solidify the foundation of any organization. Though, Majekodunmi said compliance to regulation oftentimes could be costly, coupled with the rigor of running a regulatory entity, “they are essentials to the success of the firm.”

She also mentioned that regulators define a level playing field, businesses compete within those bounds, and consumers benefit from a system that encourages both innovation and stability.

On his part, Akinpelu Akinola, also of CIBN, said that no system is perfect when it comes to regulation, however, “regulation and compliance are for the common good of the people. It becomes bad when it is retrogressive.”

He emphasized that collaboration between stakeholders and regulators fuels sectoral growth and sustainability.

“This strategic convergence of influential players underscores an overarching mission to empower startups. The Fintech sector’s thriving future hinges on innovative solutions that honor regulations while stimulating growth. As the Fintech landscape evolves, these industry leaders stand united in their commitment to nurturing startups and amplifying their impact on the Nigerian economy,” he added.

As Co-Founder at The Nest, Oluwajoba Oloba eloquently puts it, “This forum reflects our unwavering dedication to fostering an enabling environment for startups. This strategic collaboration paves the way for sustainable growth and amplifies the potential for startups to thrive within a balanced regulatory framework.”