Dr Babatunde Obrimah, COO of Fintech Association of Nigeria: “Traditional finance and banking companies can learn valuable lessons from disruptors in the fintech space”

According to the World Bank, Nigeria’s fintech sector accounts for roughly a third of Africa’s fintech market – a market that is “booming” according to a 2022 McKinsey & Company Report. And who better to explain what’s going on than the Chief Operating Officer of Fintech Association of Nigeria, Dr Babatunde Obrimah?

His role is simple: to support the growth of fintechs in Nigeria. A big part of this is connecting the people and companies together, and Babatunde has plenty of experience within the sector to call upon – before joining the Fintech Association, he worked at a long list of established banks and challengers.

As such, he’s seen exactly what the existing banks need to learn from the startups. And isn’t afraid to share that information in the interview below! So whether you already work in the sector, or are looking for advice on how to become part of it, keep reading.

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Could you please introduce yourself to our audience and share how you ended up working in fintech?

My first two degrees are in Agriculture and my research for my postgraduate program was on the in-vitro culture of Sorghum. That exposed me to studies in the genetic engineering of crops and a belief and understanding that technological advancement is the solution to a lot of the challenges we have in Africa and the issues of food security. I then went ahead to work in the banking and non-banking financial sectors.

The mantra of the Fintech Association of Nigeria (FintechNGR) is “to drive digital inclusion” in Nigeria. No one wakes up and feels like paying Visa, PayPal, Interswitch or Mastercard. People are paying for food, transport, education, health and shelter. Vertical players (agritech, insurtech, edtech, healthtech, proptech, etc) leverage the payment platforms for ease of transaction to provide service to their customers. FintechNGR being an inclusive association, aligned with my aspirations of digitalization of the entire economic sector, so, I joined as the COO. The Fintech ecosystem will grow bigger if we grow the verticals.

The Association is driven by three objectives:

• To connect all stakeholders and 23 sectors of the economy represented.
• To accelerate technological growth through leadership publications, thought leadership interventions and capacity-building initiatives.
• Lastly to advocate by working with regulators and government agencies to ensure that policies and frameworks support innovation and growth of the fintech ecosystem. Considering technology is always ahead of regulation, we believe that engagement is important and currently have a “Reguvator” forum that brings together regulators and innovators on a quarterly basis to discuss issues affecting the ecosystem.  

What do you think traditional finance and banking companies can learn from disruptors in the fintech space?

The cashless policy in Nigeria in 2023 revealed the strengths and advancements of fintechs in the country. The massive surge in digital transactions revealed the gaps in the digital infrastructure of several traditional banks and traditional finance companies as we saw the fintechs stepping up their game and becoming the brides of the customers.

Traditional finance and banking companies can learn valuable lessons from disruptors in the fintech space and one of these lessons is the need to embrace innovation by creating new products and services, adopting new technologies, investing in the research of new solutions and adapting their business models to stay competitive in the digital age.

As traditional banks begin to embrace new technologies, it is also important that they establish a customer-centric approach when creating new products. Fintech companies have been hailed for prioritising user experience and customer satisfaction in the delivery of their products which was a major factor in the massive pull of customers. Traditional banks should learn to be more agile and flexible in their product delivery. We all know fintechs for their agility and flexibility in responding to market changes and customer demands. It is important for traditional financial companies to streamline their processes, reduce bureaucracy, and become more responsive to customers’ ever-changing demands.

Related reading: The biggest challenges for Fintech in Africa in 2024

What are your top three fintech predictions for the upcoming years?

First, consolidation through M&As. Expect to see increased consolidation activity within the fintech space. Smaller players may merge or be acquired by larger players, seeking economies of scale, broader market reach and access to advanced technologies. This consolidation will likely lead to the emergence of a few dominant players shaping the industry landscape.

Second, for local solutions to drive global impact. While hedging against currency fluctuations through international tools has been common, I anticipate a surge in the adoption of locally developed productivity tools by enterprise customers.

Third, I expect a funding landscape transformation. More local investors will likely participate in funding rounds, injecting much-needed capital into the ecosystem. Additionally, we might see larger players raising capital from local exchanges, further deepening their roots in the Nigerian market.

Beyond these predictions, look out for increased adoption of blockchain technology. I expect this to fortify security and transparency in financial transactions.

I also predict enhanced regulatory frameworks to foster responsible innovation while protecting consumer interests.

The Nigerian fintech sector is poised for an exciting future, and these predictions highlight just a few of the developments we can expect in the coming years.

Which fintech sectors do you believe are prime for investment in 2025 and beyond?

Nobody wakes up in the morning and chooses to pay Mastercard, Visa, Paypal, Interswitch or Flutterwave. People pay for food, shelter, transport, health, education, etc. So, there are still a lot of uncharted waters in several fintech vertical sectors such as agrictech, healthtech, proptech, edtech, and more.

These verticals require a payment platform to ensure ease of transaction. These I believe are sectors prime for investment.

Then there are the blockchain and cryptocurrency sectors. The continued evolution and national acceptance of blockchain technology and cryptocurrency presents investors with a goldmine of investment opportunities in areas such as decentralised finance (DeFi) and crypto asset management.

The regtech and compliance sector has gradually become ripe for investment as fintechs are finding regulatory requirements increasingly burdensome – hence the need for regulatory and compliance solutions such as anti-money laundering (AML) solutions and eKYC verifications among others.

The last notable sector is embedded finance. The integration of financial services into non-financial platforms offers lucrative investment prospects. Fintech startups specialising in embedded lending, insurance and white-label financial products are poised for substantial growth and success.

Recommended reading: Top ten breakthrough fintech companies

What are some of the biggest challenges the fintech sector is experiencing as a whole?

I see three key areas of concern.

First, a slowdown from investors year on year. While early-stage fintech ventures continue to attract funding, later-stage investments have slowed down year-on-year. This can limit the scaling potential of promising companies and dampen overall industry momentum. Factors contributing to this slowdown include rising interest rates, inflation, and a general shift in investor sentiment towards established tech giants.

We can’t ignore operational cost pressures either. Fintech companies, especially those relying heavily on international partnerships or technology, face rising costs due to factors like currency fluctuations. The strengthening dollar, for instance, can significantly impact operational expenses for companies with dollar-denominated costs, squeezing margins and hindering profitability.

Third on my list is the ever-present threat of cybercrime. Fraudsters and hackers constantly evolve their tactics, targeting vulnerabilities in fintech systems to steal data and compromise user accounts. Data breaches and cyberattacks can erode consumer trust, damage brand reputation and incur significant financial losses. Continuously investing in cybersecurity measures and fostering user awareness is crucial for mitigating these risks.

Beyond these challenges, it’s important to acknowledge the ongoing need for regulatory clarity. Evolving technologies and business models often outpace existing regulations, creating uncertainty and hindering innovation. Collaborative efforts between regulators and fintech players are crucial for establishing clear and adaptable frameworks that promote responsible growth.

We also need financial inclusion, because ensuring access to financial services for underserved communities remains a critical challenge. Fintech can play a vital role in driving financial inclusion by developing innovative solutions tailored to specific needs and overcoming traditional barriers to access.

Finally, talent acquisition and development. The fintech sector requires a skilled workforce equipped with specialised knowledge and technical expertise. Fostering collaboration between academia, industry and government can create targeted training programs and attract top talent to the sector.

What advice do you have for aspiring professionals wanting to work in fintech?

If I could summarise it in one sentence, it would be “think solutions”. Aspiring professionals eager to embark on a journey in the electrifying world of fintech must be solving real-life problems to succeed. By nurturing certain key qualities and taking strategic steps, you can navigate this dynamic landscape and find your place. Here’s a roadmap to guide your exploration!

Before diving headfirst, cultivate a genuine curiosity about the industry. Immerse yourself in articles, attend industry events, network with professionals, and explore diverse fintech applications. This will help you identify areas that resonate with your interests and align with your skills and aspirations.

You must also embrace the learner’s mindset. Initially, you may feel like an outsider navigating a complex ecosystem. Embrace this learning phase! Actively seek mentorship from experienced professionals, attend webinars and workshops, and engage actively in online communities dedicated to fintech. Ask questions.

Depending on your chosen niche, focus on developing relevant skills like financial modelling, data analysis, blockchain technology, cybersecurity or user experience design. Online courses, workshops and certifications can help you bridge the gap and build a robust skillset.

My final advice boils down to three words: network, network, network. Building your network is a crucial pillar for success in fintech. Actively participate in industry events, conferences and online forums. Engage with professionals on LinkedIn, participate in discussions, and contribute meaningfully to the community. This will open doors to valuable connections and potential opportunities.

Seeking experiences like internships, freelance projects or volunteering with fintech startups or established companies can provide invaluable hands-on experience.

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