E-Financial
FintechNGR, Africa Fintech Network Call for Enhanced Collaboration and Innovation on Cross-Border Payments and Remittances
In a continued effort to drive innovation and collaboration within the fintech sector, the Fintech Association of Nigeria (FintechNGR), in partnership with the Africa Fintech Network (AFN), hosted an impactful webinar on August 20, 2024.
The event, themed “Scaling Cross-Border Payments and Remittances,” brought together industry leaders to discuss the challenges and opportunities in advancing cross-border financial transactions.
The webinar, which had average of about 200 participants, featured key insights from seasoned practitioners and experts from across Africa, Hong Kong and Singapore.
The dialogue covered the opportunities and challenges to scaling cross-border payments to boost livelihood and intra-Africa trade as well as trade between Africa and the rest of the world; leveraging the development in fintech and wider digital finance space.
Opening the event, Jacqualine Jumah, Director of Advocacy and Capacity Development at AfricaNenda, highlighted key trends in payment volumes across Africa.
She noted that the continent has witnessed a significant surge in digital payment volumes, driven by increased mobile penetration and the adoption of fintech solutions.
However, she cautioned that while the growth is encouraging, the continent must address infrastructural and regulatory challenges to sustain this upward trajectory.
On the pressing issues of fraud, data privacy, and the need for strategic partnerships across Africa; Abiodun Animashaun, Country Director of Chipper Cash, emphasized the critical need for robust anti-fraud measures in cross-border transactions.
He highlighted that the success of these measures relies heavily on global collaboration between the private and public sectors, stressing that this cooperation is essential for enhancing the security and efficiency of cross-border payments.
Similarly, Paul Li, President Hong Kong Fintech Industry Association, addressed the challenges posed by varying privacy laws on the international transfer of data.
He noted that while technology such as AI can significantly aid in fraud prevention, the infrastructure required for such solutions is often hampered by these regulatory differences.
Li, called for a more unified approach at the governmental level to facilitate smoother data transfers, suggesting that mobile based solutions and blockchain technology could offer more streamlined and secure alternatives for managing digital identities.
The event also shed light on the importance of strategic partnerships for financial institutions looking to expand across the African continent.
Ho Chee Wai, Lead Consultant at JFourth Solutions based in Singapore, advocated for collaboration with established players in target markets, noting that such partnerships are crucial for easing the complexities associated with regional expansion.
He emphasized that such alliances are not only beneficial for entering new markets but are also vital for accelerating the setup and operation of financial services across Africa.
Furthermore, the discussion highlighted the potential of a unified digital identity system in Africa. The panelists explored the use of mobile phones and biometric information to create blockchain-based ID tokens, which could significantly streamline Know Your Customer (KYC) processes.
They suggested this approach would be more efficient and secure compared to traditional ID methods, which often face significant logistical challenges.
Reflecting on the relevance of traditional platforms such as SWIFT, questions were raised as to the true benefits for intra-Africa trade given challenges such as the need for settlement in non-African currencies and the associated volatility in African currencies; significant declined in correspondent banking relationship between Africa and advanced economies; and the relatively high transaction costs.
The view held was that fintech solutions, specifically tailored to the African context, might offer more effective and innovative alternatives.
On the issue of cyber fraud and insurance, Animashaun pointed out the difficulties fintech companies face in obtaining affordable coverage, attributing this to the limited anti-fraud infrastructure.
He noted that insurance companies often struggle to offer reasonable rates, necessitating case-by-case negotiations by fintech firms.
Overall, the webinar underscored the need for continued dialogue, collaboration, and innovation to overcome the challenges in cross-border payments and remittances. It also set the stage for further discussions on blockchain technology, which will be explored in more depth during the upcoming Nigeria Fintech Week in October 2024.
These initiatives reaffirm FintechNGR and Africa Fintech Network’s commitment to fostering an innovation-driven environment not only in Nigeria, but across the entire Africa fintech ecosystem. By leveraging technology and strategic collaborations, both organizations continue to play a pivotal role in enhancing efficiency, security, and accessibility in the financial services sector.
The exchange rate stabilised in the FX market as the Central Bank of Nigeria (CBN), defended the local currency with $360 million, stemming a negative tide from increased demand for the US dollar.
Olayemi Cardoso, Governor, Central Bank of Nigeria
According to Market Forces Africa, for most part of the week, the naira experienced heightened volatility due to an FX liquidity shortage in the official window, brought forward from the previous week.
This caused the exchange rate to wobble against the US dollar, but late picked up as inflows into the market improved.
On Friday, the naira rebounded against the dominant foreign currency, the US dollar, in last-minute transactions supported by a relatively higher liquidity supply by the monetary authority.
The exchange rate appreciated by about 2% to settle at N1,517.93 in the official market on Friday after persistent negative volatile.
Spot FX data from the regulator showed that the naira gained N29.89 on the day following FX sales to banks.
The market liquidity was also supported by additional inflows from foreign sources and reduced demand for foreign payments.
FX interventions and inflows from offshore clients and local corporations boosted volume of US dollar in the official window, AIICO Capital Limited dropped the hint in an investors note.
In the market, demand pressure persisted, leading to fluctuations in the US dollar to naira exchange rate for most of the week.
The CBN sold $188.10 million to banks, the last auction offered at the range of N1,532.00 to N1,540.00, bringing the total FX sales for the week to $360.00 million, according to investment banking firm TrustBanc Financial Group Limited.
Despite these interventions, demand outpaced supply, causing the naira to depreciate. By the end of the week, the market recorded improved liquidity, with trades ranging between N1,480 and N1,548.
Data from the CBN revealed that Nigeria’s external reserves increased by USD12.06 million to USD38.36 billion after 9 consecutive weeks of decline. In the forwards market, the naira rates decreased by 0.6% for a one-month contract to N1, 577.80.
The Securities and Exchange Commission (SEC) has cancelled the registration of Mainland Trust Limited, and suspended Centurion Registrars, following their failure to comply with regulatory directives.
The commission made the disclosure through circulars which were released at the weekend. The circular on Mainland Trust Limited read: “The Securities and Exchange Commission hereby notifies the general public that the registration of Mainland Trust Limited as a capital market operator has been cancelled with immediate effect.
“This cancellation order is made pursuant to the powers of the Commission under Section 38(4) of the Investments and Securities Act, 2007 and Rule 34(1)(e) of the SEC Consolidated Rules and Regulations 2013.
“The Commission’s decision is informed by the company’s failure to comply with regulatory directives and non-resolution of several complaints against it.
“All clients of Mainland Trust Limited are by this notice advised to contact the Central Securities Clearing Systems Plc (CSCS) for appropriate guidance on the transfer of their stocks to another stockbroker of their choice.”
SEC directed that the Nigerian Exchange Group (NGX), the Institute of Capital Market Registrars (ICMR), the Chartered Institute of Stockbrokers (CIS), the Central Securities Clearing System (CSCS) Plc and all capital market trade associations to discontinue capital market-related dealings with the company.
In the same vein, the SEC announced the suspension of Centurion Registrars Limited, its directors and sponsored individuals from capital market activities with immediate effect.
The SEC said the suspension order was made pursuant to the powers of the Commission under Section 38(4) & (5) of the Investments and Securities Act, 2007 and Rule 34(1)(e) of the SEC Consolidated Rules and Regulations 2013.
It explained that its decision was informed by the company’s failure to comply with regulatory directives and non-resolution of several complaints against it.
“All clients of Centurion Registrars Limited are advised to contact Africa Prudential Plc for appropriate guidance on the transfer of their portfolios to another Registrar of their choice.
“In addition, the Nigerian Exchange Group (NGX), the Institute of Capital Market Registrars (ICMR), the Chartered Institute of Stockbrokers (CIS), the Central Securities Clearing System (CSCS) Plc and all Capital Market Trade Association are directed to discontinue capital market related dealings with the company and its principal officers,” the circular stated.
The commission also disclosed that in furtherance of the commission’s unwavering commitment to the maintenance of zero tolerance for infractions in the Nigerian capital market and in line with its revised enforcement strategies, stakeholders and the general public are hereby informed that henceforth, the names of capital market operators (CMOs) found to have violated market laws/regulations would be published in the commission’s “name and shame” journal.
“The publication would be in addition to the sanctions/penalties for the respective infractions prescribed in the ISA 2007 and the SEC Rules and Regulations.
“This enforcement strategy underscores the Commission’s dedication to safeguarding the integrity and stability of the Nigerian capital market, protecting investors, and ensuring strict adherence to established rules and regulations.
“Stakeholders and CMOs are advised to be guided accordingly” the commission added.
FirstBank has formally denied allegations of fraud in an ongoing court case filed by customer Dr. Agbai Eke, describing the claims as “entirely unfounded and false.”
According to a statement from the bank, their internal investigation points to “unprofessional and unethical dealings” between Dr. Eke and a former bank employee.
FirstBank claims these individuals used a personal relationship to conduct unauthorised transactions without the bank’s knowledge or involvement.
The bank said it has reported the matter to law enforcement authorities for further investigation.
Officials noted that suspects have already provided statements to investigators.
FirstBank also declined to provide additional details, citing the ongoing court proceedings.
“We will refrain from further comments to allow the Court to dispassionately determine the issues before it,” the bank stated.
The case gained public attention following reports by Thisday Newspaper and Arise Television, as well as through a circulating video regarding the legal dispute.
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