Stakeholders in the financial sector have said newer technologies are transforming banking services, challenges and opportunities for the players.
This was their position during the 2017 Cyber Security Summit organised by the Information Security Society of Africa (ISSAN) in collaboration with Microsoft, in Lagos at the weekend,
According to them, the emergence of technology platforms such as Blockchain is gradually transforming financial services andthe future of technology platforms.
The summit brought together representatives from the financial services sector, regulators and other stakeholders to discuss business and security issues around Blockchain technology, crypto-currency and the emergence of FinTech, globally and, specifically, in Nigeria.
ISSAN president, Dr. David Isiavwe, said the global Blockchain technology market size was valued at about $509.1 million in 2015 and is predicted to gain momentum over time while research has also stated that the worldwide Blockchain technology market is forecast to reach $7.74 trillion by 2024, with the financial services sector accounting for the majority of the future market growth.
Blockchain is the world’s leading software platform for digital assets while a digital currency in which encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds, operating independently of a central bank.
Said he: “The Blockchain technology, therefore, is one of the most promising upcoming technological trends in the information technology domain.
“Not only does the technology hold the ability to disrupt the way the financial services sector functions, but it will also have implications for many other industries, including consumer goods, technology, media and telecom, insurance and health care, among others.”
He said there has been a flurry of new start-ups, announcements, new use cases, and applications being developed using Blockchain technology, noting that research provides strong evidence that the technology could transform existing business models and invent new forms of business in a profound way.
“A wide range of players in the finance market are looking out for investment opportunities and many have made the first phase of investments to develop products and services in the industry.
“Though the market may be struggling with regulatory uncertainties and security concerns, we expect that these teething issues will be resolved and we will see Blockchain technology playing a more significant role in deciding the future of financial services as well as other segments of the economy,” he said.
Isiavwe added that there are numerous benefits involved in developing such a platform have already attracted global attention and hence investments, from the financial sector as well as many technological giants.
On his part, Director of Banking and Payments System, Central Bank of Nigeria, Mr. Dipo Fotokun, disclosed that the CBN was aware of technological development in financial services industry and it is considering a regulatory framework for the financial technology sub-sector of the financial services industry to guarantee industry sanity.
Fatokun added that the apex bank is observing how technology platforms are transforming the traditional banking system and that efforts are being made to monitor the trends and make policies that will prevent them from creating chaos in the industry.
He explained that technology, in all forms, has become highly instrumental to and will continue to play a significant role in the transformation of the banking sector now and in the future.
“At CBN, we know that the future of banking is more focused on leveraging technology than brick and mortal banks that will disappear in the not too distant future and whether on Blockchain, crypto-currency and FinTech, the CBN will be at the forefront of developing regulatory framework that will prevent them from causing negative impacts on the economy,” he said.
“It is not unlikely that the prediction that most banks will soon go branchless will come to be but what is unlikely is that it will start in Nigeria immediately. CBN will continue to be; the deposit money banks will continue to b; it is just the structures, dynamics and channels of transactions that will change.