The Department For International Development, DFID, Financial Conduct Authority, FCA and the Securities and Exchange Commission, SEC have agreed to collaborate to develope the Fintech space in Nigeria.
Speaking when she received officials of both organisations in Abuja weekend, Acting Director General of SEC, Ms. Mary Uduk said the SEC was enthusiastic about the collaboration as it would encourage responsible use of new technologies and digital finance in the capital market, influence increased international participation & cooperation, and also provide investors with more choices in the Nigerian Capital Market.
She said the SEC is looking to adopt regulatory and supervisory practices for orderly development and stability of Fintech, as the Commission will pay close attention to sustaining confidence and safeguarding the integrity of the market.
“In this way, our policies will facilitate the safe entry of new products, activities and intermediaries. In addition, we will ensure that regulation does not stand in the way of innovation”.
She said While it is clear that FinTech has already made huge inroads into many aspects of the financial industry, what is perhaps even clearer is that the surface has barely been scratched in relation to what FinTech can do for us in the future.
According to her “The awareness of customers that their data might be prone to cyber-attacks could make them lose trust in digital channels until strong consumer protection frameworks are in place. These frameworks for digital financial services will be critical in building confidence for consumers.
“We have come up with ways to monitor the risks that may come up. It’s like a sandbox, but not an enclave. We are building capacity to train young people that would be able to drive the process.
“We hope that this year will be a turning point. We are trying to gather as much information as we can to be able to contextualise and synthesise regulation in Nigeria
“Young people are begining to get interested in investment and they are doing this via Fintech and that is why we are doing all that we can to develop rules around it so that the risk will be mitigated and it will further develop the market
In his remarks, Senior Adviser, UK DFID, Mr Richard Sandall, said DFID and FCA have a partnership to support FCA to step into new jurisdictions to deliver DFID objectives in certain areas.
He said, “We are in Nigeria to look at the FinTech environment, regulatory environment and see if there are ways the Fintech environment can be built.
“We are very interested in the impacts that Fintechs in Nigeria would have in the UK. We know that Nigeria has Fintechs and the FCA has already established international networks.
He said the agreement with FCA is for up to two years and during that time modalities would be put in place to work with regulators and that is why they have come to the SEC.
“We know the SEC has enthusiasm for Fintech and we want to help develop it as much as we can” Sandall added.
Also speaking, Nigeria Lead, FCA, Mr Parma Bains, said they have done some work with the SEC in the past and are very comfortable working with the Commission.
Brains expressed appreciation to the SEC for the opportunity to collaborate and expressed the belief that it is the begining of many collaborative relationship that will span for the next two years of the project.
“We are available to provide collaboration and assistance in the area of Fintech and we are also open to learn how you regulate the market and some other roles you perform” Bains added.
On her part, Technical Specialist, FCA Barr Alicia Kedzierski
Said she was impressed by the depth your research has taken, the fact that you have gone to various jurisdictions to try to find out what is happening is a good step.
“SEC Nigeria is the first regulator that we have seen that looks into the millennial and the risks that could lead to long term issues.
“There has to be balance, regulation as well as ensure that they are not closed out” she said.
The idea behind the UK-Africa Fintech partnership is to connect African entrepreneurs with British fintech investors and business mentors to access the finance and advice needed to start and grow their companies. The UK’s Financial Conduct Authority (FCA) will work with its regulatory counterparts in Africa. A dedicated fund worth up to £2m will support Nigerian start-ups.