Fintech’s growing popularity threatens the profitability of Nigerian banks – fintech Bitcoin News

Financial technology companies (fintechs) are now among the biggest threats to the overall profitability of Nigerian banks, analysts at the country’s Coronation Merchant Bank (CMB) warn.

The efficiency of fintech

As a local media report explains, this threat from fintech services stems from their growing popularity with “tech savvy” customers. According to CMB analysts, such customers prefer to use the more efficient services of fintechs than visiting physical branches of conventional banks.

Although conventional Nigerian banks are “apparently unaffected” by this threat, the media report quotes Guy Czartoryski, head of research at CMB, and explains why the results of his bank’s study must be taken seriously. Using internet banks like Kuda, Carbon and Rubies as examples of fintech services that pose a threat to banks, Czartoryski said:

These banking platforms are attractive to millennials and other tech-savvy customers and require little or no physical presence in the banking business. The obvious advantage over traditional commercial banks is the low cost.

Banks are already competing with fintechs

Meanwhile, the same report also quotes Czartoryski, who explains why banks appear to be indifferent to this threat. According to Czartoryski, banks are not too worried because they “see themselves as partners of Internet banks, offering customers cash withdrawals and clearing services”.

In addition, conventional banks “also offer their own USSD-based offers”. This therefore suggests that conventional banks are competing with internet banks in some areas. Nevertheless, Czartoryski comes to the conclusion that “only time will tell whether the conventional banks are justified in their trust or just complacent”.

Do you agree that fintechs are jeopardizing the long-term viability of Nigerian banks? Let us know what you think in the comments section below.

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