Personal Finance

Practice Of Financial Technology And Its Regulation In Nigeria

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According to a reference post on Koladopamulc.com,The Financial industry is one of the most important industries in existence as they carry out financial duties and obligations necessary for the smooth running of human lives.

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The Financial industry is one of the most important industries in existence as they carry out financial duties and obligations necessary for the smooth running of human lives. The banking industry, being a major provider of financial services has over time evolved from the use of Analog banking to the use of technology in accordance with the current realities.

Financial technologies are computer programs and technologies used to enable and complement banking and financial services. It is the generic term used to describe the technology (internet, mobile devices, software app, cloud services etc) which are used in delivering financial services that are exclusive to traditional financial institutions. It integrates various types of financial services into the day to day lives of customers. This generation is used to technology and wants to manage their money in an easy and quick manner instead of walking to physical branches to perform transactions and other operations. Thus fintech involves the use of smart phones and internet services for mobile banking, investments, borrowing services and crypto currency.

On a broader scale, fintech can be said to be any innovative idea that improves financial service processes by proposing technological solutions according to different business situations/challenges. In Nigeria, fintech is majorly introduced by tech startups whose aim is to ease the business of banking by providing rudimentary software easily accessible on mobile devices. The lively entrance of fintech startups into the Nigerian economy has grown so high that it is predicted that by 2022, the fintech revenue would have risen to 543 Million US Dollars (The Economist, Intelligence Unit 2020 report). This would be made possible through the use of smart phones amongst Nigerians. Some examples of fintech companies include; Square, Worldpay, Paypal, Paystack, Interswitch, Remita etc.

 

 

BRIEF HISTORY OF FINTECH

It is difficult to pinpoint when financial technology began but the 1950’s are a good reference point. The 1950’s saw the Introduction of Credit Cards. Instead of carrying cash, people used their cards to pay for their purchases. In the 1960’s Automated Teller Machine (ATM) were Introduced, meaning that people no longer had to visit bank branches for certain transactions. Banks also started using mainframe computers for record keeping and data storage. In the 1970’s, firms began to trade stocks electronically. In the 1981, the first IBM PC was invented, ending the dominance of time sharing terminal computing. In the 1990’s, e–commerce business models and the internet thrived. Because of this, retail investors could experiment with online stock trading.

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