New opportunities to build business around fintech, as infrastructure and policies improve
It is becoming more easier to build a fintech platform these days. Consider PiggyBank turning into PiggyVest, with great arrays of financial products including savings and investment. There are also Page Financial, Palmcredit, Carbon and a few others dotting the Nigerian financial transaction space in a little less than half a decade.
Of course, big data, improved infrastructure provided by middlemen plug-and-play apps that enable fintech to access products provided by traditional banks, relaxed regulatory, savers insurance, a knack to do everything on the smartphone by current generation, and a low entry capital, are few of the many factors that will aid anyone with serious intention of entering the fintech market.
In no time, definitely, Nigeria will witness a surge in fintech activities. That prediction is in accordance with trends in America especially.
For instance Paypal and Square, two tech-based financial service platforms are worth $150 billion dollars today. The same goes for Capital One which began as a fintech platform selling credit cards in the 90s but has grown so exponentially to absorb some traditional banks.
There is also Dave, a startup that used app to help people escape extra charges for making overdraft. Dave has extended further. It now uses its platform to help people making interchange and earn 1-2% of every transaction made by its 4.5 million users. By the end of 2019, Dave will bring in $100 million in revenue compared to the $19million revenue it recorded in the previous year. Yet Dave hardly operates in bricks and mortar branches. Compared to traditional banks, which are more capital intensive to operate, fintech is nimble.
McKinsey, a global consultancy firm, predicts that by 2025, fintech service providers will grow from the current total of 5000 globally and would have poached around 40% of traditional banks’ customers. \
That growth and threat will happen in Nigeria as well. Opay is currently acquiring users data across its mobility and food delivery apps. Like Dave, it may deploy that big data in a bid to extend into financial service.
One more area of advantage is the Central Bank of Nigeria (CBN) drive to improve the level of financial inclusion in the country. While traditional banks are at a disadvantage due to operational expenses involved in locating in sparsely populated areas, fintech is nimble and can operate anywhere there is internet connectivity.
The opportunities available to fintech startups are enormous. Traditional banks are already moving into that space too to secure their future. Any smart young person that can secure some hundred dollars backing can play in the fintech industry.