• Banks struggle to retain talents as telcos launch aggressive headhunt• DMBs source viable fintechs for acquisition
Why is this so? With advancement in digital technologies, many fintech firms started providing all the services as retail banks through Internet platforms and smartphone apps. “The payment firms are not contended with stealing a chunk of the retail market from commercials banks, but are daily displacing the banks and installing themselves as the new retail kings,” lamented an investment banker in one of the nation’s first generation banks.
“Currently, telcos provide the communication channels through which communication occurs in the finance industry. Telcos also serve as the backbone for the facilitation of virtual transactions by banks. “And if the PSB licence given to telcos goes beyond being payment agents to include taking of deposits and granting of credits,” the financial expert noted.“The days of existence of some traditional banks may be numbered. However, if telcos are prevented from being deposit-taking and credit granting financial institutions, the backbone of traditional banking business will remain intact.”
Ife is, however, optimistic that any initiative that would capture over 80 million Nigerians outside the financial system would help to deliver double-digit growth to both information and communication technology and financial service sectors concurrently, making the competition ahead a potential win-win battle.
“You will also notice that the revenues coming from commissions and fees have increased over the years because the banks have also leveraged technology to reposition themselves in ATMs, Point of Sale , virtual payment platforms among other options. The banks are responding well. Their incomes from non-conventional banking have increased tremendously,” Chukwu argued.
“In the coming months, some fintech firms, which are start-ups, would be acquired by banks, which are eager to consolidate their position and increase their market share in the ecosystem. There will be more partnerships, which are being firmed up,” the source hinted. DMBs have a first-mover advantage in the fintech space, having established themselves long before MTN and Airtel applied for licences to operate PSBs. Some banks have stand-alone fintech that have become household names while others run full-fledged departments that manage integrated digital services.
Further checks showed that with the license, MTN might start to deploy ATMs in some locations to enable customers’ withdrawal of cash just like commercial banks.