Rise Of Fintech: Nigeria’s Legislative Framework Must Evolve — Senator Abiru

Emerging risks related to cybersecurity and the rise of fintech and digital financial services makes it imperative for Nigeria’s legislative frameworks for the sector to evolve, Senator Mukhail Abiru has said.

Senator Abiru, who is Chairman of the Senate Committee on Banking, Insurance, and Other Financial Institutions, said this recently in Lagos at a retreat organised by his committee and the Nigeria Deposit Insurance Corporation (NDIC).

“We must ensure that regulators like the CBN and the NDIC have the tools they need to effectively oversee the financial sector, while also encouraging innovation and competition,” he told stakeholders in his keynote speech.

By encouraging innovation and competition, he expects Nigeria to make the most of emerging opportunities, especially in digital banking.

This is because he is aware that along with the opportunities that fintech provide comes challenges.

“As we continue to embrace digital banking and financial technologies, the threats posed by cybercrime and data breaches are becoming more pronounced,” he said.

“Recent cybersecurity incidents in the banking sector highlight the need for more stringent regulatory oversight and greater investment in cybersecurity measures.

Legislative interventions must prioritise the establishment of robust cybersecurity frameworks that safeguard not only financial institutions but also the sensitive data of millions of Nigerians.”

‘Resilience is not static’ While calling for legislative intervention in the financial sector, Senator Abiru informed stakeholders that Nigeria already has resilient banking and insurance sectors, governed by robust regulatory frameworks.

This, he explained, is backed by the ability of the sectors to withstand the unprecedented challenges that financial systems have faced in recent years from economic downturns, the COVID-19 pandemic and forex market illiquidity.

“Amidst these challenges, the Nigerian banking and insurance sectors have demonstrated remarkable resilience, a testament to the strength of our institutions and the robust regulatory frameworks governing them,” he said.

The resilient and robust regulatory framework currently in place was enabled by such things as timely amendments to laws such as the Nigerian Deposit Insurance Corporation (NDIC) Act, and the Banks and Other Financial Institutions Act (BOFIA).

“Be that as it may, resilience is not static. It is a dynamic quality that must be continuously nurtured, adapted, and reinforced,” Senator Abiru said.

“This is where effective legislative interventions come into play. As lawmakers, we are entrusted with the critical responsibility of ensuring that our legal frameworks are not only robust but also forward-looking, capable of anticipating future challenges and opportunities.”

To chart the best path forward, the lawmaker believes it will take concerted efforts. He said, “Indeed, building a resilient financial system is not the sole responsibility of lawmakers or regulators.

It requires the collective efforts of all stakeholders – from the banking and insurance sectors to FINTECH companies, depositors, and the wider Nigerian public. Collaborative partnerships are key to ensuring that our financial systems are both resilient and inclusive.

“I therefore call on all stakeholders present here today to actively participate in shaping the future of our financial systems. Your expertise, insights, and experiences are invaluable in guiding legislative reforms that will enhance the resilience of our financial systems. Together, we can build a financial sector that not only withstands external shocks but also plays a pivotal role in driving Nigeria’s economic growth.”

Olusola Akintonde