Fintech Firm Urges CBN to Strengthen Enforcement of Open Banking

By Omolabake Fasogbon

Nigeria’s leading financial technology company, SystemSpecs has urged the Central Bank of Nigeria, CBN to scale up compliance with open banking regulation.

The firm expressed that doing so would spur the development of data-driven and innovative products.

Speaking at a Summit in Lagos recently, Executive Director in charge of Payment Business at SystemSpecs, Ezinne Obikile also sought for balance between innovation and regulation to ensure a healthy financial technology ecosystem for the benefit of all stakeholders.

She decried a situation whereby regulation would be in conflict with innovations, as she said that both should synergise to engender a growing and resilient financial system. Speaking on the theme ‘Stick and Carrot: Walking the Tight Rope between Regulation and Innovation,’ Obikile called for more interactions and collaborations between regulators and players in fintech industry.

She noted that growth in the payment technology sector has been hampered by ambiguities and uncertainty in new regulations, which can only addressed by deliberate collaboration between regulators and players.

She said, “The Know Your Customer (KYC) policy and updated guides to charges are some of the most challenging regulations in the fintech sector currently. While the overall intention is to drive financial inclusion and combat money laundering and fraud, obtaining and verifying KYC information has become challenging especially for those targeting the underbanked.”

“Calls for customer data acquisition and verification from data custodians come at sunk costs that are difficult to pass on to consumers if the regulated pricing must work. Also sometimes, data is not readily available and when it is, it does not always come in usable formats.

She thus called for the big stick of KYC compliance to be complimented by the carrot of data availability for both regulation and innovation to be simultaneously successful in the financial technology industry.

“It is in engagement by regulators that they will better understand industry dynamics, and the feedbacks from such interactions will be very useful in formulating successful policies,” she maintained.