Traditional Banks and the Evolution of Fintech Companies: Competition or Collaboration?

Description

ABSTRACT

Traditional Banks and the Evolution of Fintech Companies: Competition or Collaboration?

Yunus Adelodun* & M Oyabambi**

The truism that FinTech is rapidly growing in Nigeria is inarguable. The industry was heavily criticised for lacking recognition from investors and policymakers. However, the constant evolution of technology and its application in the banking sector contributes greatly to the growth of Financial Technology industries. The reoccurring emergence and growth of Financial Technology institutions (FinTech) in Nigeria can be attributed to the cashless policy introduced to the Nigerian market by the Central Bank of Nigeria. As a result, FinTech is rapidly penetrating virtually every sector in Nigeria. The invention of the telephone, mobile applications and the internet have increased access to finance, thereby greatly influencing the evolution of the traditional banking system and finance. Technology integration into finance processes takes the form of capital market trading, investment, mobile payment process, mobile banking etc. Due to the explosive effect of FinTech on Nigeria’s banking system, there is the need to analyse in detail what FinTech subsumes, side by side with an analysis of traditional banking and to climax with the expansive effect of a possible collaboration between the traditional system and financial technology. This paper also aims to provide solutions to the breach of data issues created by the explosive use of the internet by analysing relevant data protection regulations. It also seeks to analyse the effect of various policies and regulations on the overall growth or otherwise of FinTech industries. This paper also provides an expository into the merits of financial technology companies over traditional banking. The aforementioned will be done by consulting diverse renowned legal texts and relevant statutory authorities.

Keywords: Financial Technology (FinTech), Banking, Economy, Traditional Banking

INTRODUCTION
FinTech in its simplest form, means the application of technological innovation to financial services. It entails asset management, retail banking, money transfers, digital insurance and cryptocurrency. It is said that FinTech is the new dawn of the modern financial world.₁ The rise of FinTech has transformed the global financial market by introducing critical technologies that affect the banking sector in particular and other sectors of the global economy in general.₂

 * LL.B, (University of Ilorin), BL.
** LL.B (University of Ilorin), BL. ACIS, Aciarb.

1. Bo Li and Zeshui Xu, ‘Insights into financial technology (FinTech): a bibliometric and visual study’
   (2021) (7)69 Financial Innovation; accessed 13 November 2022.
2. London Premier Centre, ‘FinTech Innovation changing Banking Industry Future’ (24 February 2022); accessed 13 November 2022.

THE GRAVITAS REVIEW OF BUSINESS & PROPERTY LAW Vol.14 No.2