The Director-General of the Nigeria Securities and Exchange Commission (SEC), Emomotimi Agama, has strongly advocated for smart regulation to balance the rapid growth of fintech with the pressing need for investor protection and market integrity. Speaking at the Nigeria Fintech Week 2024, themed “Positioning Africa’s Fintech Ecosystem to Accelerate Inclusive Growth,” Agama emphasized fintech’s transformative potential in reshaping Africa’s financial landscape. However, he also warned of significant risks, such as cyber-attacks and the misuse of investment data, which demand urgent regulatory attention.
Key Regulatory Concerns in Fintech
Agama highlighted the growing concerns over the misuse of investment data, increased cyber vulnerabilities, and the unchecked rise of unregulated fintech firms. These risks, he explained, expose investors to potential fraud, undermining the SEC’s mandate to protect them. Smart regulation is vital, he said, to evolve swiftly and address these risks while ensuring that fintech innovation doesn’t compromise market integrity.
The Need for Smart Regulation
To mitigate these risks, Agama advocated for a smart regulation approach. He described it as a flexible yet rigorous framework, which promotes innovation while ensuring that fintech firms meet necessary security, consumer protection, and market integrity standards. As part of this strategy, the SEC has launched several initiatives, including a Regulatory Innovation Program, designed to allow fintech firms to test their business models in a controlled environment before scaling up. This initiative aims to position Nigeria as a leading fintech hub in Africa.
Agama pointed out that these regulatory measures are already showing positive results. Several fintech firms have received regulatory approvals, and others are undergoing assessments, ensuring that fintech innovation thrives within a safe and secure regulatory framework.
Fintech has vast potential to drive financial inclusion, economic growth, and wealth creation in Africa. Agama urged fintech innovators to develop tailored solutions for Africa’s unique challenges. Additionally, he called on governments to support fintech through initiatives such as digital infrastructure development, public-private partnerships, and skills-building programs for the digital economy. Collaboration between fintech innovators, investors, and regulators is essential for creating a harmonized and efficient regulatory landscape that fosters growth.
Opportunities and Challenges in Fintech
Ade Bajomo, President of FintechNGR, echoed Agama’s sentiments, emphasizing the massive untapped market in Africa. According to Bajomo, 40 million Nigerians and 350 million Africans remain financially excluded, providing immense opportunities for fintech innovation. Despite challenges such as inadequate infrastructure, unreliable power supply, and talent shortages, Bajomo urged fintech companies to remain focused on their goals. He encouraged leveraging technology and innovation to enhance governance and scale processes.
Bajomo also stressed that with great opportunity comes great responsibility. He called for stronger collaboration between fintech companies and regulators to co-develop policies addressing the industry’s challenges. The Nigeria Fintech Association will continue to connect stakeholders, advocate for fintech growth, and collaborate with regulators to proactively address emerging issues.
Smart Regulation for Growth
With the right balance of smart regulation and innovation, Africa’s fintech ecosystem is set to accelerate inclusive growth, offering transformative financial services across the continent. The SEC’s emphasis on smart regulation, coupled with the collaborative efforts of industry players, can help ensure a better fintech future for Africa.
