Global spread of mobile phones and cellular networks are facilitating easier access to financial services in hard-to-reach populations and small businesses at low cost and risk in developing countries.
Managing Director and Chief Executive Officer (MD/CEO), Sterling Bank Plc, Mr. Suleiman Abubakar, said this while delivering a paper as guest speaker at a breakfast roundtable organised by the Financial Services Group of the Lagos Chamber of Commerce and Industry (LCCI) on deepening financial inclusion through data analytics and financial technology in Lagos recently.
Abubakar who was represented by Sterling Bank’s Chief Information Technology Officer, Mr. Olayinka Oni, noted that in the context of financial inclusion, “Fintechs hold tremendous potential, challenging old business models with greater speed, accountability and efficiency at a cheaper cost.”
He said access to financial products and services is becoming more attainable than ever for consumers that live in rural locations or regions without the equipment and infrastructure of a modern economy due to the prevalence of mobile phones and cellular networks.
Abubakar said financial institutions and Fintechs could objectively use data analytics to extend credit to consumers who previously had to contend with sometimes exploitative informal credit because they had no formal credit history.
He remarked that it is essential for a country to have strong political commitment and coordination across relevant stakeholder groups in both the public and private sectors of the economy to achieve financial inclusion. In addition, the country must put in place wide-reaching policies that promote responsible financial access, financial capability, innovative products and delivery mechanisms, the guest speaker said.
He stressed the impact of data on financial inclusion, saying as customer transactions around the world become increasingly digitised, data analytics can shed light on patterns such as how frequently and for what purposes customers use their accounts to provide some benefits for financially excluded customers.
Benefits that can be obtained from this approach include insights on financing, accelerating customer product adoption, improved marketing effectiveness and agent network optimisation, he said.
Also speaking at the roundtable were Mr. Tunde Kehinde, co-founder of Lidya and Nazipho Sibanda, finance director at Rack Centre Limited who both agreed that mobile phones are driving financial inclusion not just in Nigeria but across Africa which is home to about 16 percent of the world’s population with only 29 percent internet penetration.
In his comments, LCCI President, Mr. Ruwase Paul, said information and technology have continued to drive entrepreneurship, innovation and sustainable business models in Nigeria and beyond. He added that technology-driven service delivery and mobile payment solutions have transformed the way people do business today.