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AFN President Reveals Why Nigerian Fintech Companies Face Regulatory Issues

Published:

  • Segun Aina, the president of the African Fintech network discloses why Nigerian fintech companies face regulatory issues.
  • According to the president, the key reason lies in the dynamic nature of the technology-enabled approach fintech companies operate with.
  • Regulators and governments struggle to cope with regulatory measures on fintech due to the dynamic nature of the sector.
  • While regulations could be cumbersome for many within the fintech sector, they offer long-term benefits to the systems

During an exclusive interview with Nairametrics, the president of AFN, Dr. Segun Aina, reveals why Nigerian fintech companies face regulatory issues.

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According to him, the dynamic nature of the fintech sector is a major contributory factor to challenges in the field.

More Details

Dr. Aina’s speech focused on the recent crackdown on some fintech firms by the Central Bank of Nigeria (CBN).

According to the AFN president, several governments and regulators struggle to regulate technology due to its fast-moving pace. He noted the dynamic nature of the sector as it witnesses continuous changes and innovations.

Further, Dr. Aina pointed out how regulations could initiate potential impediments to the fintech sector. He expressed concern that some regulatory policies could suppress innovation.

However, he believed that with the right approaches, regulations would create outstanding benefits to the financial system at large.

Aina stated: “What is important is that policies must be friendly, must recognize that there is a need to innovate, and the policymakers must make sure that they carry along all the stakeholders so that they don’t just come up with a policy that will stifle innovation because that is worse.

Corporate Governance Could Trample On Nigerian Fintech Companies

Additionally, the AFN president how fintech firms could face challenges once there are issues in corporate governance.

Moreover, he noted that most fintech companies are just start-ups and lack corporate governance structures compared to commercial banks.

However, Dr. Aina believed such companies would start operating with the right structure as they grow with time.

Recently, the CBN mandated four fintech companies; Opay, Moniepoint, Palmpay, and Kuda Bank, to halt rolling in new customers.

The directive came following the apex bank’s claim that bad actors use these platforms to engage in foreign exchange via crypto trading.

Before now, the Economic and Financial Crimes Commission (EFCC) obtained a court order to freeze almost 1,146 bank accounts. The commission alleged that the accounts belong to individuals and organizations that practice illegal foreign exchange deals.

 

 

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