CBN to Increase Regulation of FinTech Companies

• CBN to Increase Regulation of FinTech Companies

The Central Bank of Nigeria (CBN) is working on plans to improve the regulation of Financial Technology (FinTech) companies operating in the country.

Mrs. Aishah Ahmad, the Deputy Governor, Financial System Stability, CBN, made the statement during a session on “Cybersecurity Exercises: Experience from Sub-Saharan Africa” at the annual meetings of the International Monetary Fund and World Bank in Washington DC, US.

She said financial technologies are disrupting the country’s financial system mainly as a payment facilitators.

“The way FinTechs are disrupting the Nigerian financial space, a lot of it has come from the payment space. So, you see them more active in the space for receipts where they are already getting licences from us,” she stated.

Speaking further she said: “We’ve seen disruptions in the savings space and disruptions in the micro-lending space. So, these are not organisations that the CBN is not aware of. But broadly speaking, our focus has been to identify these organisations.

“That is why we are trying to finalise the incubation of some of these companies. So, there are those we need to identify and watch what they are doing and there are those we need to refine our regulatory framework for; because right now, it is skewed to banks and the payment service companies. We are also looking at moving from regulation by identification, to more around regulating their activity.

“So if you are not a bank, you cannot get a banking license, but if you operate as a bank then we have to regulate what you do. We are looking at ensuring professionalism as well as in what we do in terms of regulation.

“We don’t want to stifle innovation, so we want more companies to come up and assist, because fintechs do a lot in furthering the financial inclusion objectives of the central bank.

“The CBN is working very hard in that respect and we are open to all organisations that are willing to come on board.”

She explained that cybersecurity is a regulatory issue as it has the potential to disrupt information technology operations as well as the financial system, therefore, she said it is imperative that central banks properly regulate the industry.

“We had some of these guidelines and frameworks in place, it’s about strengthening them and identifying where you need to improve layout regulations so that they are fit for purpose.

“The culture of disclosure starts with ensuring that there is adequate information sharing and collaboration among stakeholders. That is where it should start from. So we have created a framework or platform where the chief information security officers as a body have an opportunity to share some of these incidences first of all and we will then agree going forward because a lot of these incidences are attempts and of course, we don’t want a successful attempt,” Mrs Ahmad said.