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PAFON 1.0: Experts Harp on Stricter Data Privacy Measures in Payments Ecosystem in AI Era

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Mr. Festus Amede, Chairman of the Committee of Chief Information Security Officers of Nigerian Financial Institutions (CCISONFI) has identified Data Minimization Principles, User Consent and Control, as well as Compliance with Privacy Regulations as important elements in protecting privacy in payments.

L-R: Olusola Odediran, Chief Information Security Officer, NIBSS/representative of Chairman, Committee of Chief Information Security Officers of Nigerian Financial Institutions; Chike Onwuegbuchi, co-founder, TechCastle Foundation; Adekunle Ajayi, Product Manager, Cloud and Digital Solutions, inq. Digital Nigeria Ltd; Abidemi Akinola, Chief Compliance Officer, Remita; Efemena Ogie, Head, Partnership, Monipoint Inc., and Peter Oluka, Editor, Techeconomy, during, the Payments Forum Nigeria (PAFON 1.0) event on, ‘Payments: Trust, Security and Privacy in AI era’ held in Lagos recently.

Amede who was represented by an executive member of CCISONFI, Mr. Olusola Odediran (also, the Chief Information Security Officer) Nigeria Inter-Bank Settlement System (NIBSS), spoke during his keynote presentation at the maiden edition of Payments Forum Nigeria (PAFON 1.0) held at Oriental Hotel, Lagos on Thursday.

His presentation themed, ‘Payments: Trust, Security and Privacy in the AI Era,’ explored the critical aspects of trust, security, and privacy in payments, and provided insights into the challenges, solutions, and future trends in safeguarding transactions in the digital landscape.

The CCISONFI chairman stated that although the payment industry enjoys such regulatory oversights arising from the Nigerian Data Protection Act (NDPA) and Data protection laws, the Payment Card Industry Data Security Standard (PCI DSS), and the compliance requirements for businesses, the industry has balanced security and convenience relying on user experience in payment security, seamless authentication methods, and biometric and tokenized payments.

On how emerging Technologies will impact the payment industry, he disclosed that while Blockchain will be deployed to ensure secure transactions, Artificial Intelligence and Machine Learning will be used in fraud prevention even as privacy-preserving computing impact cannot be underestimated.

Amede called on players in the payment industry to continue to educate consumers by providing them with tips on how to secure online payments, how to recognise phishing attempts, and the importance of keeping software updated.

He listed some of the best practices for businesses including regular security audits and penetration testing; employee training on security protocols; and ensuring collaboration with payment security experts.

Speaking further on the need to build trust in payment systems, Amede, who is also the CISO of Zenith Bank Plc emphasised the importance of trust for consumer adoption, transparency in transactions, and commitment to securing the payment infrastructure.

He stated that the Payment Systems are exposed to such threats and vulnerabilities as Cyber Attacks and Data Breaches, Phishing and Social Engineering, and malware and ransomware.

Ikenna Ndugbu, the chief compliance officer, represented by Isoken Aigbomian, the regional sales Manager, Moniepoint, highlighted the evolution of Moniepoint into a leading payment processor, stating, “We started off with a virtual account service where we automated payments or transfers, allowing customers and businesses to make and receive payments seamlessly through transfers. This was what catapulted and was modified into the limelight and household name that seems to be.”

Aigbomian emphasized the company’s focus on providing flexible payment options to businesses across various sectors, stating, “Today, Moniepoint offers a wide variety of payment options to businesses. There is an online payment platform, in-person payments option and then there are the cash payments via our ATM network, which is almost, I think, one of the largest, as well.”

She explained how Moniepoint MFB identified the need for a seamless payment experience and developed innovative solutions to address it. “So, what we did was we looked inward, and we said the most popular means of payment in Nigeria is transfer. So we worked with our engineers and were able to build an infrastructure.”

Roosevelt Elias, the founder of Payble, noted the importance of data privacy and security in the age of digital payments, stating, “It is essential to preserve the details of such trusted transactions, as they often hold significant importance for the company’s outcomes and operations.”

He endorsed cautious use of data and highlighted the need for AI encryption and compliance-based companies to protect user privacy and ensure regulatory compliance.

On the other hand, Peter Evbota, sales director at inq. Digital Nigeria Limited, spoke on artificial intelligence (AI) and its ability to transform sectors, particularly in data analytics and security.

He emphasized the power of AI in processing both structured and unstructured data, highlighting its ability to detect patterns and provide valuable insights.

Earlier in his welcome address, Mr. Chike Onwuegbuchi, co-founder of TechCastle Foundation, organisers of the event, while giving insight into why the forum was berthed, said payments are very critical in the economy of every country including Nigeria.

“Last year, before the elections, we witnessed what Nigerians faced in the payments system- ATMs were not working to dispense cash, and at merchant locations, it was difficult to make payments with banks’ PoS thanks to Moniepoint and few others that came to the rescue,” he said.

Onwuegbuchi noted that there had been issues of declined transactions and customers’ accounts debited, in addition to an existing systemic fraud, misinformation and lack of information that have led to customers losing their money to fraudsters.

“After looking at these issues and many more, we at TechCastle Foundation decided to create a platform where stakeholders could discuss these issues with the objective of making our Payments systems better,” he said.

He stated that the essence of the forum was to make the ecosystem better for every Nigerian as operators, regulators and end users are expected to discuss to find a way to make the system better.

He added that trust issues in payments, security and other industry-related issues were to be discussed at the forum by cybersecurity experts who have distinguished themselves in working with money deposit banks to ensure that cybercriminals didn’t steal money in the bank.

The inaugural edition of the Payments Forum Nigeria was a cross-industry platform that focused on addressing issues that require broad cooperation and coordination across many constituents in the payments industry.

PAFON 1.0, sponsored by Moniepoint, Digital Encode Limited, Cybervergent, inq.Digital and Payble with support from the Central Bank of Nigeria (CBN), provided participants with an inside look at the Payments industry, offering perspectives from key stakeholders, including payment networks, technology innovators, leading merchants, issuers, acquirers, and payment processors.


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E-Financial

Swiftlink to Deepen Financial Inclusion with Payment Services

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Alhaji Umaru Abdul Mutallab, Chairman, Swiftlink Global Services Limited, has said the company remained committed to supporting the significant achievements in financial inclusion driven by the initiatives, programmes, and policies of the Central Bank of Nigeria (CBN) and the Federal Ministry of Finance.

Speaking at the recent launch of Swiftlink in Abuja, he said the platform will provide a robust, accessible, affordable, efficient, and adequate financial solution for the under- banked and un-banked in the nooks and crannies of the country.

He said the company seeks to become the major digital payment service provider especially in the North East where such footprints are almost non-existent.

Abdul Mutallab said the platform will engage in collections, payment and value-added services, terminal management, and agency banking services.

He said, “This is a journey to create harmonies for a system where even the everyday traders and farmers in villages can effortlessly access financial services from the convenience of their surroundings in a language that resonates with them and also access disbursements on social intervention programmes of the government and other development partners.”

 


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Stanbic IBTC Expands Securities Lending to Fixed Income Securities

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Stanbic IBTC Bank Limited, has announced the extension of its securities lending services to include fixed income securities.

This development marks a new milestone in the Nigerian capital market, providing clients with enhanced opportunities for income generation and increased market liquidity.

With this development, institutional clients, both local and international, can now borrow and lend not just equities but also fixed income securities such as Federal Government Bonds and Treasury Bills, offering them greater flexibility and diversified investment options.

Head, Investor Services at Stanbic IBTC Bank Limited, Babatunde Majiyagbe, in a statement said: “Expanding our securities lending services to include fixed income securities provides our clients with broader opportunities to generate income and enhances overall market liquidity.

“This expansion not only broadens the scope of our offerings but also a provides our clients with wider range of assets to optimise their investment strategies and achieve their business objectives, enhancing the overall liquidity and efficiency of the Nigerian capital market. This move underscores our commitment to driving innovation and growth in the Nigerian capital market.”

Majiyagbe added: “Securities lending facilitates continuous trading and liquidity, which are essential for a vibrant market. Our expansion into fixed income securities will attract more investors and foster a more robust and resilient capital market.

“In 2023 alone, we facilitated the lending of assets worth 150 million naira,” Majiyagbe noted. “This reflects the growing trust and demand for our securities lending services and underscores our role in enhancing market liquidity and efficiency.”

 


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Fidelity Bank’s Consistent Strong Growth Excites Investors

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Fidelity Bank Plc has recorded an average annual profit growth of 64 per cent over the past three years, underlining its resilience as one of Nigeria’s fastest growing companies.

The bank has also seen rapid expansion in customer base and assets as total balance sheet size leapt from N2.1 trillion to N6.2 trillion, the sixth largest in the Nigerian banking industry. The balance sheet was driven by a hefty total deposit of more than N4 trillion, equally the sixth biggest in the industry.

A review of the audited reports and accounts of Fidelity Bank between 2023 and 2020 showed double-digit growths over the years with cumulative average annual growth rate (CAGR) in earnings, profitability and assets significantly above average industry rate and within the best performance among publicly quoted companies.

Average annual profit growth rate of 64 per cent underscores Fidelity Bank’s fundamental strength as an inflation-hedging investment. The operational growth strengthens the overall return outlook of the bank, which share price has delivered an average annual capital gain of more than 100 per cent in five years at the stock market.

Several experts’ reviews have said the bank’s strong historical performance is a major attraction for its ongoing combined rights and public offer.

Fidelity Bank is offering a rights issue of 3.2 billion ordinary shares of 50 kobo each at N9.25 per share. The bank is also simultaneously offering 10 billion ordinary shares of 50 kobo each to the general investing public at N9.75 per share.

The acceptance and application lists for the rights issue and public offer, which opened on Thursday, June 20, 2024, are scheduled to close on Monday, July 29, 2024. The rights issue has been pre-allotted on the basis of one new ordinary share for every 10 existing ordinary shares held as at the close of business on Friday, January 05, 2024.

Fidelity Bank’s gross earnings rose successively from N206 billion in 2020 to N251 billion, N337 billion and N556 billion in 2021, 2022 and 2023 respectively, representing average annual growth of 39 per cent. Profit before tax has grown consecutively from N28 billion in 2020 to N124 billion in 2023. Profit after tax jumped from N26.65 billion in 2020 to N99.45 billion in 2023. Earnings per share has also grown from 92 kobo in 2020 to N3.11 in 2023, showing the headroom for increased dividends to shareholders.

The bank’s profitability has been driven by continuous increase in market share, a strong commitment to national economic growth with supports for businesses and high customer trust.

Fidelity Bank’s total assets has grown successively from N2.11 trillion in 2019 to N2.76 trillion in 2020 and consecutively to N3.28 trillion, N3.99 trillion and N6.23 trillion in 2021, 2022 and 2023 respectively. Shareholders’ funds have also grown successively from N234.03 billion in 2019 to N273.53 billion, N285.29 billion, N314.36 billion and N437.31 billion in 2020, 2021, 2022 and 2023 respectively.

Total deposit has grown by an average annual growth of 33 per cent from N1.7 trillion in 2020 to N4.02 trillion in 2023. A breakdown underlined a strong customer confidence with low-cost deposit accounting for 97.4 per cent of total deposit.

Low-cost deposit has grown at a faster CAGR of 44 per cent over the period, rising from N1.31 trillion in 2020 to N3.91 trillion in 2023. Savings accounts had also doubled over the period from N424 billion in 2020 to N881 billion in 2023, representing average annual growth rate of 28 per cent.

Fidelity Bank has more than 8.0 million customers, with 5.1 million of these customers on digital channels, underlining the strength of the bank’s robust information and communication technology.

As customers increasingly entrust the bank with their funds, Fidelity Bank has also shown equally aggressive commitment to national economic growth with average annual growth of 32 per cent in net loans.

Net loans have grown successively from N1.32 trillion in 2020 to N1.66 trillion, N2.12 trillion and N3.09 trillion in 2021, 2022 and 2023 respectively. The above average growth in loans shows Fidelity Bank’s famed supports for Nigerian businesses. The bank’s loans portfolio is the fifth largest in the Nigerian banking industry.

A frontline industrialist and a customer of the bank, Dr Kamoru Yusuf, Founder of KAM Holding, said Fidelity Bank has been exceptional in supporting the development of Nigerian companies.

Yusuf, whose group has metamorphosed into a global business conglomerate operating in three countries across two continents, confirmed that KAM Holding has benefited immensely from financial supports from Fidelity Bank.

He said investing in Fidelity Bank will be an investment in the growth of Nigerian economy and companies like KAM Holding, the nation’s largest wholly indigenous metal and steel production company.

He underlined the relationship between increased capital for a business-focused bank like Fidelity Bank and the overall development of the Nigerian economy.

There are strong indications that the bank will sustain its impressive growth record in the years ahead. Already, interim report and account of the bank for the first quarter ended March 31, 2024 showed that the bank started the current business year on stronger footing with three-digit growths across key performance indicators.

The three-month report showed that gross earnings increased by 89.9 per cent to N192.1 billion in first quarter 2024. The bank’s top-line performance continued to be driven by broad-based growths across income lines with interest income rising by 90.7 per cent and non-interest income growing by 84 per cent in first quarter 2024.

Growth in interest income was primarily spurred by a higher yield environment and strong earning assets base, while the increase in non-interest income was led by double-digit growth in account maintenance charges, foreign exchange (forex)-related income, trade, banking services, and remittances, supported by increased customer transactions.

Profit before tax doubled by 120 per cent to N39.5 billion in first quarter 2024 as against N17.9 billion in first quarter 2023. The bank’s performance was driven by expanding market share with total deposit rising by 17 per cent within the three months to N4.7 trillion, compared with N4 trillion recorded at the end of 2023.

The bank also increased its supports for national economic growth with net loans and advances rising by 21 per cent from N3.1 trillion at the end of 2023 to N3.7 trillion by March 2024.


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