Global Experts Examine Gains of Open Banking, Rally Innovators at First Bank Fintech Summit 5.0

Global Experts Examine Gains of Open Banking, Rally Innovators at First Bank Fintech Summit 5.0

Open banking and its derivative opportunities for the financial ecosystem, banking customers and the Nigerian economy were at the fore of discussions at the First Bank Fintech Summit 5.0, THECONSCIENCEng reports.

The virtual event which gathered financial experts across the globe to chart the next path for banking in Nigeria was in line with First Bank’s commitments to deepening financial inclusion in Nigeria through various initiatives including engagements with fintech innovators.

The nation’s premier bank has over the years sustained its lead role in creating platforms for rallying key players and engendering critical conversations that will further drive innovation around and boost fintech in Nigeria through the first bank annual Fintech Summit.

While delivering his keynote address, Professor Ndubuisi Ekekwe, a Faculty lead at tekedia Institute USA who holds a Doctorate degree in electrical and computer engineering from the John Hopkins University, USA, revealed that understanding the dynamics of data holds the key to consolidating development of the financial sector.

The business engineering expert and tech innovator who spoke on the topic ‘Open Banking: the Grand unification of applications utilities’ quoted the Greek philosopher, Pythagoras’ view that the essence of life lies in numbers.

He said, “The essence of life and key to unlocking many potentials are in numbers. The business of humanity is the business of numbers. The quest for growing any sector is in how to build better data systems around understanding numbers in the sector. The more businesses understand numbers the better they are able to satisfy customers needs.”

On Nigeria’s growth potentials, the professor projected that, “It can hit $3trillion GDP by 2035 through aggressive efforts despite its current underperforming state of less than $500billion. It can grow by the power of 6.”

Ekekwe traced the history of American business evolution and explained: “The history of American economy from the perspective of top 10 companies over a period of 100 years between 1917 and 2017 shares critical similarities with Nigeria.

“The 1917s era was dominated by steel companies (Building) but 50 years later around 1967 technology infrastructure companies like IBM and AT&T were dominant. Now from 2017, Knowledge brands like Facebook, Google/Alphabet, Apple, Microsoft and Amazon are dominating.

“In Nigeria, the infrastructure and technology companies like Dangote, BUA, MTN, Airtel are dominant because we are at the building stage and we will move to the phase of knowledge like America. The clear pattern is that Nigeria has combined the 1917 and 1967 phases of economic evolution of America. And by 2030, I am expecting that companies in Nigeria whether listed on the Nigeria Stock Exchange or otherwise would have attained the knowledge phase status.”

The professor who sits on several boards said, “Though Open Banking will include banks sharing customers data with other experts, it will help access and connect more people with informal means including rural people who own lands and cattles but are currently excluded from the formal systems.

“This will lead to better spread of wealth and loans access and will eventually drive the intelligent lending innovation currently practised in the United States of America and Europe.

“In the long run, the business economy would be an expanded pie for all while digital APIs would drive open data as against the current manual mode which is currently practised and is not without same risk of privacy breach that customers are concerned about.

“Open banking will drive further growth in agriculture, healthcare, education, technology and real estate in Nigeria. It has the capacity to unify all major sectors of the economy into the construct of the banking system and will lead to integrated growth and development.

“Most activities in the market system are backed by banking activities. The banking sector is the most innovative in Nigeria, with many revolutionary outputs including the BVN helping to capture data and people. Without their investments, other sectors like fintech can’t thrive,” he concluded.

Also speaking at the Summit 5.0, Ankit Sharma, Director of Strategy at PwC based in Mexico explained that open banking refers to opening up internal banking data and processes to external companies and other industry players, including financial and non-financial for intelligent customisation of the customers personae amongst others.

Sharma said, “The current model in Nigeria runs on closed one to one banking relationship between customers and banks for different user cases. But open banking thrives on collaboration model. Data is shared through the API system. In addition, banks currently owns the data, but in the open banking model customers own, control access and define objectives for release and use. “

“Globally, the current open banking practice features services such as personal finance manager called PFM which aggregates data from customers banks, insurance and others and generate advisories and financial status within minutes.

“In realtime, a customer can see comprehensive financial standing covering all accounts and assets and liabilities history and how he or she has fared within a period as well as the current worth generally in finances. PFM is well established in Europe, US and Scandinavian etc. “

He added, “Credit scoring is also resolved with Open banking. Seamless payments, operations cost and timing are enhanced for merchants and SME’s.”

“To prepare for open banking, Ankit advised Nigerian banks to focus on integrated process strategy, upgrade of technology architecture for APIs, and strengthening security and governance.”

Dr. Adesola Adeduntan, CEO of the continent’s financial inclusion and innovation pacesetter while addressing participants said FirstBank was excited to create a global platform for conversations around the future of innovation in the financial technology space.

He said the objective was to contribute to the evolution of banking and finance service delivery while the edition themed “Open Banking and its Derivative Opportunities in the Financial Ecosystem” promised to be exciting and engaging with a line-up of local and international thought leaders ready to spur the conversation around the prospects for open banking.

“The theme recognizes the increasing pervasive role open data, cloud technology and artificial intelligence play in the financial ecosystem.

“Open banking today demonstrates the practical fusion of these variables, presenting remarkable potentials that can redefine product development, customer experience and overall value creation; with multiplier effects for both players and consumers, he added.

He reiterated that the Regulatory Framework for Open Banking in Nigeria, issued by the Central Bank of Nigeria on the rules and premises under which financial data sharing can take place across the financial ecosystem and the National Information Technology Development Agency’s (NITDA) Nigerian Data Protection Regulation (NDPR) 2019, were demonstrations of the future of regulations around Open Banking.

He added that, “As an institution of 127 years and having traversed series of regulatory transformation over the years, FirstBank will continue to play its role in furthering conversations to refine regulatory frameworks and shape thoughts on industry and societal developments.

“We will also continue to demonstrate our support for start-ups and innovators in the fintech space by providing them the relevant data support and infrastructure to enable them to scale appropriately.

“Every step we take continues to be geared towards strategically positioning us as the bridgehead and reference point for fintech and financial services providers across the African continent, as we will continue to lead the charge towards realizing the future of banking.
I am very optimistic that the financial services industry will benefit from the conversations at this year’s Fintech Summit.

“I am also positive that this platform will continue to come up with innovative solutions to further drive growth and deepen financial inclusion as we explore the inherent opportunities in Open Banking with other experts across industries. Thank you once again for joining us, and I wish you a most rewarding experience at the Fintech Summit 5.0., he added.

Other notable experts during the panel sessions outlined several key issues and benefits of open banking.

They include Professor Olayinka David-West, Associate Dean at the Lagos Business School LBS, a professor of information system with almost 30 years experience; Musa Itopa Jimoh, Director of Payment Systems Management at the Central Bank of Nigeria represented by Mr. Olubukola Akinwunmi; Aminu Maida, Executive Director at Nigeria Inter-bank Settlement System PLC; Ope Adeoye, Chief Plumber at One Pipe and Olayinka Shittu, Chief Strategy and Transformation Officer at the First Bank of Nigeria FBN.