Report: Fintech’s Growing Popularity a Threat to Profitability of Nigerian Banks

Financial technology companies (fintechs) are now among the biggest threats to the overall profitability of Nigerian banks, analysts from the country’s Coronation Merchant Bank (CMB) have warned.

The Efficiency of Fintech

As a report carried by local media explains, this threat from fintech services stems from their growing popularity with “tech-literate” customers. According to CMB analysts, such customers prefer using the more efficient services offered by fintechs to visiting physical branches of conventional banks.

Although Nigerian conventional banks are “apparently not concerned” about this threat, the media report, however, quotes Guy Czartoryski, head of research at CMB, explaining why the findings of his bank’s study must be taken seriously. Using internet banks such as Kuda, Carbon and Rubies as examples of fintech services that pose a threat to banks, Czartoryski explained:

These banking platforms are attractive to millennials and other tech-literate customers and require little or no physical banking presence. The obvious advantage they have over conventional commercial banks is low cost.

Banks Already Competing With Fintechs

Meanwhile, the same report also quotes Czartoryski explaining why banks are seemingly indifferent to this threat. According to Czartoryski, banks are not overly concerned because they “see themselves as partners with internet banks, offering customers cash withdrawals and supplying them with clearing service.”

In addition, conventional banks “also offer their own USSD-based offerings.” This, therefore, suggests that conventional banks are competing with internet banks in some areas. Still, Czartoryski concludes that only “time will tell whether the conventional banks are justified in their confidence, or merely complacent.”

Do you agree that fintechs are a threat to the long-term profitability of Nigerian banks? Tell us what you think in the comments section below.

Leave a Reply

Your email address will not be published. Required fields are marked *

Share:

Share on telegram
Share on facebook
Share on twitter
Share on linkedin
Share on whatsapp

Related Posts

bitcoin
Bitcoin (BTC) $ 62,910.86
ethereum
Ethereum (ETH) $ 3,063.00
tether
Tether (USDT) $ 1.00
bnb
BNB (BNB) $ 546.94
solana
Solana (SOL) $ 134.57
usd-coin
USDC (USDC) $ 1.00
staked-ether
Lido Staked Ether (STETH) $ 3,056.71
xrp
XRP (XRP) $ 0.490352
dogecoin
Dogecoin (DOGE) $ 0.154567
the-open-network
Toncoin (TON) $ 6.34
cardano
Cardano (ADA) $ 0.459582
avalanche-2
Avalanche (AVAX) $ 34.84
shiba-inu
Shiba Inu (SHIB) $ 0.000021
wrapped-bitcoin
Wrapped Bitcoin (WBTC) $ 62,890.85
tron
TRON (TRX) $ 0.110932
bitcoin-cash
Bitcoin Cash (BCH) $ 483.38
polkadot
Polkadot (DOT) $ 6.63
chainlink
Chainlink (LINK) $ 13.39
matic-network
Polygon (MATIC) $ 0.699889
litecoin
Litecoin (LTC) $ 77.53
internet-computer
Internet Computer (ICP) $ 12.20
leo-token
LEO Token (LEO) $ 5.86
near
NEAR Protocol (NEAR) $ 5.09
uniswap
Uniswap (UNI) $ 7.10
dai
Dai (DAI) $ 0.999706
first-digital-usd
First Digital USD (FDUSD) $ 1.00
ethereum-classic
Ethereum Classic (ETC) $ 26.17
aptos
Aptos (APT) $ 8.84
mantle
Mantle (MNT) $ 1.13
blockstack
Stacks (STX) $ 2.49
okb
OKB (OKB) $ 58.44
bittensor
Bittensor (TAO) $ 511.50
crypto-com-chain
Cronos (CRO) $ 0.126017
filecoin
Filecoin (FIL) $ 5.96
render-token
Render (RNDR) $ 8.31
cosmos
Cosmos Hub (ATOM) $ 8.05
stellar
Stellar (XLM) $ 0.106866
arbitrum
Arbitrum (ARB) $ 1.13
vechain
VeChain (VET) $ 0.039826
maker
Maker (MKR) $ 3,077.72
hedera-hashgraph
Hedera (HBAR) $ 0.078823
immutable-x
Immutable (IMX) $ 1.93
kaspa
Kaspa (KAS) $ 0.118491
dogwifcoin
dogwifhat (WIF) $ 2.60
the-graph
The Graph (GRT) $ 0.252181
ethena-usde
Ethena USDe (USDE) $ 1.00
optimism
Optimism (OP) $ 2.19
wrapped-eeth
Wrapped eETH (WEETH) $ 3,171.63
injective-protocol
Injective (INJ) $ 24.36
monero
Monero (XMR) $ 120.65