FINTECH NIGERIA: Digital payment users may hit 146.10m in 2027
The Nigerian Financial Technology, FinTech industry was in its infancy a few years ago, but has now matured, becoming a major player in Africa.
The industry is gradually gaining international recognition and is increasingly embraced by consumers with stronger collaboration with existing enterprises.
The industry is growing sub-sectors, which are trending and bolstering the aggregate economy. Digital payments, digital investment, digital capital raising, digital assets, and neo-banking are emerging as some of the most significant trends.
The industry’s largest market appears to be the Digital Investment which according to Statistica, will have a total transaction value of US$58.37m before the last quarter of this year.
The average transaction value per user in the Digital Investment market is also projected to amount to US$15.78 in 2024 while the number of users is expected to amount to 146.10m users by 2027.
The statistics are not surprising considering the number of individuals seeking low-cost and easy-to-use investment options.
However, despite the size of digital investment, Digital payments have also seen an unprecedented surge in popularity, with consumers increasingly relying on mobile payment solutions for their day-to-day transactions.
Digital capital has also become an attractive option for startups and SMEs, as it provides an efficient way to access funding. The rise of digital assets, such as cryptocurrencies and NFTs, has also created new opportunities for investors and traders, while neo-banks have disrupted the traditional banking industry by providing innovative, customer-centric solutions that cater to the needs of today’s digital-savvy consumers.
The rapidly evolving FinTech industry is spurred by several factors, among which is the COVID-19 pandemic which introduced the new world and accelerated shift towards digital payments and investments. The Pandemic pushed the consumers to adapt to remote and contactless transactions.
The increasing internet penetration and rapid adoption of smartphones are also major factors. They made digital solutions more accessible to consumers, leading to a surge in demand for fintech services.
Tech innovations also played major roles as technologies like Artificial Intelligence, AI and blockchain, came to open up new possibilities for the FinTech industry, driving further growth in the market
There is also no gainsaying that regulatory tweaks to accommodate the FinTechs have also contributed immensely to a situation where fintech companies not only collaborate, but compete with traditional financial institutions on a more level playing field
These factors and their impacts have created an opportunity for FinTech to contribute to economic growth.
However, to sustain the momentum, a new white paper, “Nigerian FinTech’s Cloud Adoption White Paper”released by Huawei Technologies Ltd in collaboration with FinTechNGR, the umbrella body of Fintech companies demanded that FinTech companies scale up values even as the white paper makes some value propositions.
The White Paper gives a comprehensive analysis of the current state, requirements, and challenges of the FinTech industry in Nigeria, providing practical solutions through cloudification. By offering a cloud adoption framework, the white paper assists small- and medium-sized enterprises in migrating to, utilizing, and managing the cloud effectively, thereby facilitating accelerated cloud-based transformation within the FinTech sector.
Its ultimate goal is to provide the fintech industry with cloud-based concepts, methods, systems, and best practices.
In its value proposition, the White paper demands that payments, mobile money and digital banking segment of the FinTech should provide payment and accounting solutions for consumers and financial institutions. FinTech lenders should assess borrowers’ credit worthiness and automate the underwriting process.
This is also as it demands that Savings, investment and crowdfunding segment should provide solutions to the consumers to save money and help private and institutional investors to buy, sell, and manage assets and securities
It tasked the Enterprise services and infrastructure segment to provide enterprise software and solutions for the financial industry, including tools for managing accounts, finance processes.
It advised Cryptocurrency exchanges and wallets to provide access to digital cryptocurrency markets and exchanges to enable users to pay or accept cryptocurrency much more easily.
The white paper also demands easy access to insurance for consumers either directly or through marketplaces as well as to provide new technologies to enable traditional insurers.
The White Paper also emphasizes the importance of considering four key aspects of cloud adoption within the industry: Regulatory Compliance: The white paper provides insights into how Nigerian FinTech enterprises on Huawei Cloud comply with international and local laws and regulations, ensuring regulatory requirements are met.
Cloud Security: Huawei Cloud presents a comprehensive security framework and success cases, assuring FinTech enterprises of robust security measures necessary for cloud migration.
Cloud Native Infrastructure: The white paper emphasizes the significance of a cloud-native infrastructure and distributed FinTech architecture for successful digital and cloud transformation within the industry.
Operational Costs: The management framework outlined in the white paper offers decision-makers in FinTech enterprises a thorough analysis of cloud operational costs based on a cloud architecture.
Hugo Hu, MD Huawei Cloud, Group Head, Zenith Bank, Lanre Oladimeji and Seun Folorunso, FinTech NGR , all echoed that with Nigeria’s FinTech sector rapidly maturing into a major player in Africa, the release of the white paper highlights the growing international recognition and consumer acceptance of Nigerian FinTech solutions. The collaboration between FinTech NGR, the premier national FinTech Association in Africa, and Huawei Cloud, a leading global provider of information and communications technology (ICT) infrastructure and smart devices, aims to foster stronger synergies between FinTech startups and established enterprises, providing a platform for accelerated growth and innovation.