The summit had discussions by experts, policy influencers, and regulatory officials as well as key and leading players in the Nigerian financial, banking, and technology climate.
The need for Open Banking in Nigeria cannot be overemphasized as the importance goes beyond just convenience to its game-changing impact in transforming value creation, product conceptualization, and closing the financially excluded gap.
The event had an opening address from the managing director and CEO of the First bgnk, Dr. Adesola, Kazeem Adeduntan in which he noted that the summit is organized by FirstBank to create a global platform for conversations around the future of innovation in the financial services sector specifically in the financial technology space with the objective to contribute to the rapid evolution in banking and financial services sector.
“For us, Open Banking demonstrates the practical fusion of these variables presenting potentials that can redefine product development, customer experience and overall value creation within the financial services system.
"We will also continue to demonstrate our support for startups and innovators in the finter space by providing them with relevant data, support, and infrastructure to enable them to scale appropriately, through our SMEConnect platform." he said.
Professor Ndubuisi Ekekwe, the Chairman of FASMICRO Group and the lead Faculty in Tekedia Institute, discussed how financial institutions can use open banking access to address market frictions, improve the standard of living, further economic productivity and transform the Nigerian society into an innovative society.
Speaking at the virtual FirstBank Fintech Summit 5.0 on Open Banking: The Grand Unification of Application Utility Age, Prof. Ekekwe posited that if according to Pythagoras the world is made up of numbers, then 'it means the business of humanity is nothing but the business of numbers'.
Meaning, if a doctor understands the numbers around the human system, he/she will become a better doctor, it is the same for banks and other businesses. Therefore, the quest to getting better in any industry or society is to build a solid data system that allows operators to better understand the numbers around that industry or society.
In his explanation Prof. Ndubuisi analyzed the break down by using the inherent imperfect market systems that impede big businesses from understanding the needs of those in the rural areas, therefore, making it impossible to proffer solutions that could help further these companies' missions and visions, fast track their growth and help humanity at large.
Banks, Restaurants, Fintechs, etc must acquire capabilities that help them understand societal needs before they can proffer solutions necessary to make transactions happen. Professor Ekekwe cited the bank's position as a depository and also a lender, this he said makes it possible for borrowers willing to pay a certain percentage as an interest to approach banks for loans while those not presently in need of their monev can equally deposit it in the bank for a fraction of the interest paid by borrowers. By addressing this market friction, the bank was able to make transactions happen, support borrowers business and satisfy the need of depositors.
However, because companies that only serve the needs of customers will never be great. It is important to understand not just customers' needs but expectations and perceptions. This, Prof Ekekwe said can be achieved through the insights provided by the improved data of open banking, saying open banking offers promise to have a better insight into the future of customers.
Therefore, to unlock new growth, financial services providers must become an operating system through shared APls for all sectors. More data will translate to better insights and more market opportunities that could bolster Nigeria's Gross Domestic Product (GDP) to $3 trillion by 2035 as other companies will have access to those customers through APIs.
According to him, the knowledge system the bank can acquire from open banking ordinance will not only affect the financial services but also have the capability to impact mortgage business, real estate business and other businesses in our society.
He further stated that the effective implementation of open banking will increase available opportunities in each sector by a factor of six, bolstering Nigeria's GDP to $3 trillion by 2035. Explaining how this can be achieved, he said banks and other businesses with data from APIs will be able to expand their offerings by understanding the needs of those in the rural areas, therefore, sharing progress and prosperity in abundance across rural regions.
Bringing it all together, open banking takes banks beyond financial services to become Operating System (OS) of economies by providing retail customers with necessary analytics, viable credit systems that provide insights into their activities and encourage intelligent lending while Small and Medium Enterprises (SMEs) would have an integrated tax and accounting interface that empowers them to understand their own business, cashflow and deposit better.
Other sectors like real estate, Oil and Gas, etc perform better with Open Banking, and even compliance with regulatory guidelines become better and improve with a well-thought-out and executed open banking architecture. This, Professor Ekekwe concluded would transform Nigerian society into an innovative society.
