E-Financial
Okere X-Rays Fintech Challenge And the New Face of Banking
Financial technology (FinTech) is clearly signifying that the digital revolution has arrived in the financial services sector and Mr. Austin Okere, founder, Computer Warehouse Group (CWG Plc) and Entrepreneur in Residence, Columbia Business School, New York.
Okere, who spoke at a recent IT Reporters’ Forum in Lagos, further x-rayed the merits and demerits these challenges portend to financial services sector.
According to him, “Money is going Digital Around the world, central banks from England to China have publicly floated the notion of issuing their own national digital currencies. Conceptually, they like the idea of harnessing the upside of the digital revolution; mobile payments in particular, while preserving the existing legal and regulatory set up.
“Practically, they expect significant cost savings, a reduction of operational and fraud risks in the current payments systems, and a strengthened ability to execute monetary policy. From a consumer’s perspective, the prospect of total digital money is still mind-boggling. It is more likely that societies would not go completely digital overnight. Instead, central banks could start issuing digital currency units alongside notes and coins as base money, and adjust the mix over time, according to uptake. Once critical usage levels are reached and network effects kick in, universal adoption could happen very quickly.”
What will be the scale of change?
“How will this happen and at what scale? The changes coming will be as large as the original invention of the internet, and this may not be overstated. Who would have imagined a decade ago that e-commerce, championed by Amazon and Alibaba will be displacing high street retailers, or that ride hailing will be dominated by UBER, a technology platform. According to Anthony Jenkins, former CEO of Barclays, bank branch traffic has halved in the last five years, and bank profitability could collapse by 60% in the same period. A 2015 Goldman Sachs report estimated $4.7tn of financial services revenue was at risk of displacement from Fintech groups.”
Blockchain and Cryptocurrencies
“The key to this revolution lies in Cryptocurrencies such as bitcoin. But it is their underlying technology that is proving to be of practical benefit to organizations, the famous blockchain. This technology, which goes beyond financial application, is expected to disrupting global supply chains by boosting transaction speed across borders and improving transparency. Essentially, the blockchain is a shared virtual public ledger where encrypted transactions are confirmed by outside parties. In the bitcoin world, these outside parties are called miners (computers that solve complex mathematical problems to confirm transactions and earn fees). Confirmed transactions are placed in a “block” and added to the chain, hence the name blockchain. It is this technology that the Fintechs are leveraging to disrupt the traditional banks
“Regulators are now helping Fintechs Fintechs are getting a lot of support from Regulators, believing that Fintech firms are small enough for any problems to be manageable, and on the other hand, might produce useful innovation. For instance, the Swiss Federal Council has recently published a public consultation documentation on amendments regarding the Banking Act and Banking Ordinance in the Fintech area. The intention is to lower market entry barriers for Fintech companies. France’s Central Bank has also announced opening up a new innovation lab, aiming to collaborate with blockchain startups. In December 2015, Nasdaq executed its first trade on a blockchain, through its Linq ledger”.
speaking further, he referred to the exchange which blockchain promises to expedite trade clearing and settlement – all the steps needed to transfer the asset from seller to buyer including recording the transaction — from three days to as little as 10 minutes.
“That’s because the trades remove many manual processes and bypass third parties. As such, “settlement risk exposure can be reduced by over 99%, dramatically lowering capital costs and systemic risk,” according to Nasdaq. Other stock exchanges tinkering with the blockchain include ones in Australia, Myanmar, Germany, Japan, Korea, London and Toronto.
“Security and Compliance Security is still the biggest challenge confronting the blockchain. “The truth is, once you give someone access to a network, many times, more often than not, they can end up very easily getting blanket access to that network,” said Joe Ventura, CEO of AlphaPoint.. “This is a huge security problem.” Regarding compliance, at least regulators could have a node on the blockchain itself in which companies define their access to data, said Sandeep Kumar, managing director of Synechron. As such, regulators wouldn’t have to wait days for a bank to hand over documents for compliance.
“They can see it as it is happening.” The Future of Fintechs The future of Fintech is bright. Accenture recently released a report which found that investment in Fintech around the world has increased dramatically from $930 million in 2008 to more than $12 billion by early 2015. Many of the entrepreneurs in the industry however, fail to grasp what may eventually lead to the downfall of countless Fintech firms, particularly those that lend money. There is a belief among technology-based lenders that the goal should always be to say “yes.” If someone needs money, it’s less about whether that person or business is a good credit risk than it is about the customer experience and the length of time it will take the borrower to access the funds. The Fintechs however, counter that they employ Artificial Intelligence, Big Data and Machine Learning to glean the credit habits of customers from their mobile usage, and so have mitigated against this risk”.
Standard Bank Group has identified Nigeria and four other markets as strategic growth hubs as it seeks to tap into $15.4 billion revenue opportunity driven by expanding small and medium-sized enterprises (SMEs) and rising intra-African trade.
The bank disclosed the plan through Bill Blackie, the Chief Executive Officer of its Business and Commercial Banking (Standard Bank Group) division, who outlined the lender’s growth strategy in an interview with Bloomberg.
Under the strategy, Standard Bank will deepen its presence in Nigeria, Ghana, Kenya, Uganda and Tanzania while consolidating its dominance in South Africa. The five markets account for about 85 per cent of the estimated revenue opportunity available to the group’s BCB operations.
The expansion forms part of the lender’s broader ambition to accelerate earnings growth through 2028, leveraging increasing demand for banking services among businesses across the continent.
According to Blackie, the BCB division has recorded robust growth over the past five years, supported by rising business activity and greater demand for financial services across Africa.
He said the division doubled both headline earnings and return on capital between 2020 and 2025, with return on capital increasing from 19 per cent to 38 per cent during the period.
Earnings from operations across the continent also expanded at an average annual rate of 30 per cent.
Building on this performance, the bank is targeting compound annual growth of between eight and nine per cent through 2028, although Blackie expressed confidence that growth could reach double-digit levels as the strategy gains traction.
A key pillar of Standard Bank’s growth strategy is expanding support for SMEs and mid-sized businesses, which account for most enterprises across Africa.
The bank is particularly positioning itself to benefit from opportunities created by the African Continental Free Trade Area (AfCFTA), which is expected to accelerate economic integration and cross-border commerce across the continent.
According to the International Trade Centre, nearly half of Africa’s small businesses export to other African countries, compared with only 14 per cent of larger firms, underscoring the critical role of SMEs in driving regional commerce.
The lender is also leveraging its extensive African footprint and strategic partnership with the Industrial and Commercial Bank of China (ICBC) to attract businesses seeking access to international markets, particularly China.
The National Insurance Commission (NAICOM) has handed over the management of African Alliance Insurance Plc to a newly constituted board nominated by shareholders.
The move ends a regulatory intervention that rescued the troubled insurer from the brink of collapse.
The development marks a major milestone in the insurance industry’s efforts to strengthen policyholders’ protection and restore confidence in the sector, following months of intensive regulatory oversight aimed at stabilising the company.
NAICOM had stepped into the affairs of African Alliance Insurance in October 2024 after the insurer was hit by severe liquidity constraints, mounting annuity payment arrears, unresolved claims obligations, regulatory infractions and reputational challenges that threatened its survival and eroded public trust.
Speaking at the handover ceremony, Commissioner for Insurance, Olusegun Omosehin, said the intervention had achieved its primary objectives of restoring operational stability, settling outstanding liabilities and protecting the interests of shareholders and annuitants.
Omosehin said a successful turnaround demonstrates the regulator’s commitment to safeguarding the insurance industry while ensuring that policyholders do not bear the consequences of corporate distress.
He also highlighted the significance of the newly enacted Nigerian Insurance Industry Reform Act (NIIRA) 2025, describing it as a game-changer for the sector.
The Commissioner observed that had the fund been in existence before the African Alliance’s crisis, it would have helped to cushion the impact on policyholders by facilitating the timely settlement of legitimate claims and annuity obligations.
He charged the new board to uphold high standards of corporate governance, transparency and regulatory compliance, while prioritising prompt claims settlement, sound solvency management and prudent business practices.
Industry stakeholders view the successful rehabilitation of African Alliance as a test case for regulatory intervention in Nigeria’s insurance sector, particularly at a time when operators are under pressure to strengthen their capital base, improve governance standards and rebuild public confidence.
During its tenure, the NAICOM appointed an interim board to restore liquidity through the recovery of trapped dividend funds and other inflows, settled a significant portion of annuity arrears and legacy claims, facilitated the transfer of the company’s annuity portfolio, completed forensic and actuarial reviews and addressed several regulatory and operational challenges.
Banks and their customers lost a combined N134.48 billion after criminals using illegal stole from financial institutions and its depositors between 2020 and 2025.
Attempted fraud across the banking and payments ecosystem amounted to N187.79 billion during the six-year period, while actual losses stood at N134.48 billion, according to data contained in Nigeria Payments System Vision 2028 document, issued by the Central Bank of Nigeria (CBN).
The losses were recorded across multiple payment channels, including over-the-counter transactions, Automated Teller Machines, cheques, e-commerce platforms, Internet banking, mobile banking, Point of Sale terminals, web channels and other electronic payment platforms, highlighting the growing challenge of safeguarding Nigeria’s increasingly digital financial system.
An analysis of the data showed that fraud losses increased steadily from N11.61billionin 2020 to N12.77 billion in 2021 and N14.32 billion in 2022.
The figure rose further to N17.67 billion in 2023 before surging dramatically to N52.26 billion in 2024, the highest annual loss recorded within the six-year period.
The 2024 figure alone accounted for nearly 39 per cent of the total N134.48 billion lost between 2020 and 2025, showing the scale of the fraud challenge faced by banks, payment service providers and customers.
Similarly, attempted fraud climbed from N13.26bn in 2020 to N14.48 billion in 2021, N16.41 billion in 2022 and N19.72 billion in 2023 before jumping to N86.36 billion in 2024.
However, both attempted fraud and actual losses declined in 2025, falling to N37.57 billion and N25.85 billion, respectively.
The report attributed the sharp rise in fraud losses in 2024 largely to a major internal fraud case involving N30 billion.
According to the document, “Fraud amounts in Internet Banking, Mobile, and POS channels declined, yet overall losses rose by 196 per cent, primarily due to a major internal case involving N30bn. Web fraud incidents also increased by 169 per cent.”
The apex bank noted that the trend demonstrated how a single large-scale fraud incident could significantly distort industry-wide loss figures despite improvements in several digital payment channels.
Before the 2024 spike, the report showed that fraud patterns had evolved across different payment platforms.
In 2021, web-based fraud declined by 43 per cent, but losses still increased because of a 276 per cent rise in Point of Sale fraud incidents.
In 2022, fraud losses rose by 12 per cent, driven largely by major fraud incidents affecting corporate accounts, while ATM fraud surged by more than 2,000 per cent despite declines in mobile, POS and web channels.
The report further revealed that fraud losses in 2023 increased by 23 per cent, largely due to an explosion in e-commerce-related fraud cases. “Fraud losses rose by 23 per cent, largely due to a spike in e-Commerce incidents, which escalated by 1,961 per cent. Mobile, POS, and Web channels recorded moderate increases,” the CBN stated.
Despite the persistent fraud threat, the regulator said the industry recorded a notable improvement in 2025 following stricter controls and enhanced collaboration among stakeholders.
The document stated, “In 2025, electronic payment fraud declined by 51 per cent, demonstrating the success of stricter regulations, increased industry cooperation, enhanced prevention strategies, and improved monitoring.”
It added that the Central Bank of Nigeria, working alongside industry stakeholders, had strengthened oversight and introduced collaborative safeguards aimed at reducing vulnerabilities across payment platforms.
The findings come as Nigeria experiences an unprecedented shift towards electronic payments, with instant transfers, mobile banking, fintech applications and digital wallets becoming central to daily commercial activities.
In the foreword to the Payments System Vision 2028 document, Olayemi Cardoso, governor, CBN, said Nigeria’s payments ecosystem had evolved into one of the most dynamic and innovative in the world over the past decade, driven by real-time payments, digital adoption and fintech-led transformation.
Cardoso said the country had recorded significant growth in electronic payments and digital financial services under the previous Payments System Vision 2025 framework but stressed that the next phase would require stronger resilience and coordination as the system continued to expand.
The CBN acknowledged that while digitalisation has improved financial inclusion and lowered transaction costs, it has also created new risks that require stronger cybersecurity measures, consumer protection mechanisms and fraud-monitoring systems.
Under the new Payments System Vision 2028, the regulator plans to prioritise security, trust, innovation, interoperability, inclusion and collaboration as guiding principles for the next stage of payments system development.
The framework also seeks to strengthen regulatory oversight, improve cyber resilience and deploy emerging technologies to combat increasingly sophisticated fraud threats.
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