04/04/2023
FIN TECH
Financial Technology also referred to as FinTech is an all-encompassing term referring to all forms of software, applications and other technology which aid in facilitating and improving traditional forms of finance for businesses and consumers.
There are numerous fintech companies such as PayPal, Flutterwave, Robinhood and Mastercard.
Banks and Various companies utilize the use of Financial Technology to carry out transactions online as this brings about ease of commerce. Online payments such as subscription payments for Netflix, DSTV, and even purchasing electrical units, which are done with the aid of Credit or Debit cards employ the services of FinTech companies.
In a bid to implement a cashless policy in Nigeria, the Central Bank of Nigeria as at the year 2012, introduced policies which allowed FinTech to operate in the following capacities:
• Digital Banking
• Alternative Lending and Digital Credit
• Investment and Financial Management
• Electronic Payments
• Blockchain and Digital Currencies
The current situation of Nigeria has forced Nigerians to employ the use of various forms of FinTech to enable survival due to the scarcity of cash in the Country. Credit Cards which were introduced in the 1950s were the earliest forms of FinTech, while PayPal which was introduced in 1998 was one of the first FinTech companies. FinTech simplifies financial transactions for consumers of these products, by making access to other products easy and more affordable.
Although there may not be an Act or Law guiding the activities of FinTech Companies, FinTech in Nigeria is regulated by the Central Bank of Nigeria (CBN), the Nigerian Deposit Insurance Corporation (NDIC), the Securities and Exchange Commission (SEC), the Federal Competition and Consumer Protection Commission (FCCPC) and the Corporate Affairs Commission (CAC).
The CBN is the primary regulator of the activities of banks and other financial institutions in Nigeria. Through the Banks and Other Financial Institutions Act (BOFIA) they have the power to grant licenses to banks and financial institutions of which FinTech Companies are a signatory. All these Institutions are established by enabling acts and that in conjunction with the purview of their powers gives legality to their administration of FinTech Companies. Although there is no statutory provision that caters to the establishment and regulation of FinTech Companies, it would not be too long before there is one due to the growth and popularity of FinTech Companies.
In the 2021 case of C.B.N Governor v Rise Vest Technologies & 5 Ors FHC/ABJ/CS/822/2021, the issue before the court was the freezing of the account of Rise Vest Technology due to an alleged infraction of a C.B.N regulation by Rise Vest Technology. The Honorable Judge of the Federal High Court sitting in Abuja, in delivering his judgment held that any conduct that must be sanctioned must be in violation of an expressly stated written law. This of course is one of the many reasons why a regulatory law guiding the activities of FinTech Companies should be enacted by the National Assembly to avoid more of such situations.
