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The rise of FinTech startups in Nigeria: Would we still need banks later on?

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Hey, I was doing a bit of thinking and I came up with this. Are we truly approaching a period in Nigeria when we might not need the services of most conventional commercial banks? Emphasis on “conventional”. Of course, FinTech startups could be referred to as “banks” but not conventional ones.

In very recent times, with the increased penetration of the internet in our daily living, there has also been an increased number of FinTech startups too. Not just the increase in numbers birthed the thought, the increase in attention also did – financially. Evident is Flutterwave’s very recent round of investments where they were able to raise up to $10 Million.

How about the stats? PayStack, according to this report, processed payments which sum up to over a billion naira in a month. That’s quite a huge one. So it got me wondering…

Would banks really go extinct soon enough? What service do they render that FinTech companies do not, or are not doing better? Let’s list some of them out, shall we?

  • They transfer money between accounts

Well, this is a core function of banks too. And it is also one that startups like PayStack, Paga, Flutterwave, SimplePay, VoguePay and their likes are doing conveniently. Majority of these companies do not even have branches all over like banks, yet, they have snatched a sizeable amount of business from them. This is especially for those that do not take internet banking very seriously.

  • They help us save, or do they?

Yes, a lot of banks claim to help us save for the future. Maybe they do, but that’s not the main point here. The main point is that companies like PiggyBank and CowryWise also claim to help us do it better than them. And you know what, a whole lot of people believe them. Except for those who do not have proper access to the internet.

  • SME’s can procure loans from banks

Well, you might have not heard of PayLater, but I have. They are offering this same service and like the others, even better. Even farmers would at some point start moving in troops to FarmCrowdy to get an investor for their farms, instead of procuring loans with very high interest rates.

  • Would Banks ever go digital?

The future of cryptocurrency might not be secured yet but it sure looks very bright. So in a case where almost everyone is going digital, who do you think would be the first to implement that? Banks? Not a chance. At this point, I wonder if they’d have any monies to hold for them.

 

Well well, I might be wrong too. Maybe I didn’t think it through well, but it all seem like technology is having its run at the banking sector. Please let us in on your opinion. What do you think about this?

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