How Has Fintech Dominated Banking Systems?

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Rarzack Olaegbe


Between 2014 and 2019, Nigeria’s bustling fintech scene raised more than $600 million in funding. It attracted 25 percent ($122 million) of the $491.6 million raised by African tech start-ups in 2019.


They are professionals. They provide capital to companies that exhibit high growth potential. They are venture capitalists. They are private equity investors. They fund small companies to expand. They provide access to equities markets. These people are so germane in the value chain that a movie has honoured them.

Something Ventured is a 2011 documentary. The film investigated the advent of venture capitalism in the USA in the mid-20th century.

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It is a story of venture capitalists who have worked with entrepreneurs to start and build companies. They have been parts of Apple, Intel, Genentech, Cisco, Atari, Tandem, and other giants in the USA economy.

On The One Hand

Many established Fintech firms were propped by venture capitalists. These silent operators birthed the Fintech revolution. This revolution has transformed the world’s financial systems in the post-pandemic era. As such, the impact of Fintech in the finance industry strongly influences banks and financial institutions globally. Statistics have shown that 1.7 billion people use Fintech. People use Fintech to manage their finances without bank accounts.

Fintech has played a significant role in the development of start-up firms, firms that offer various banking services to customers. Fintech has made it easier to manage finances on the go. The 1.7 billion people use various banking services. They handle different transactions. They have done away with the bank account burden.

Once a threat to banking, Fintech has changed the game. This came through the advent of mobile payment, investment, and insurance apps. These firms operate their financial databases differently due to fintech.

Research has shown that fintech popularity has grown due to demand. Customers want unrestricted access to bank accounts. They dread the banking hall. They hated its associated stress.

The high demand was evident during the pandemic. It is happening in post-pandemic times. Will you make a transfer via an app? Or drive to the bank branch? You and I prefer hassle-free financial services. And safe. Without the venture capitalists, some Fintech firms behind this revolution would not have happened.

Sahar Hashmi in Finestcon.com wrote that around 75 percent of customers had globally adopted some form of online payment service. Another study from November 2021, suggests that there were 10,755 Fintech start-ups in America. The EMEA region has 9,323 Fintech start-ups. Asia Pacific region has 6,268 Fintech companies.

On The Other Hand

Fintech has equally brought deep-rooted changes. Aside from online and branchless banking, electronic wallets, cashless transactions, online customer care services, and the application of biometric sensors are common. Digitalguru.com shared that the global investments in Fintech ventures are a whopping $112 billion. In the year 2021, it was $51 billion. This revolution has had a huge impact on all banks and financial institutions globally.

Mckinsey said that Nigeria is home to over 200 Fintech standalone companies. Banks and mobile network operators serve the solutions from these Fintech firms as product portfolios. Between 2014 and 2019, Nigeria’s bustling fintech scene raised more than $600 million in funding. It attracted 25 percent ($122 million) of the $491.6 million raised by African tech start-ups in 2019.

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Fintech firms are solving challenges for traditional banks. Withinnigeria.com shared that traditional banks ride this wave. They are evolving daily. They are positioning themselves in the tech space. Consumer behaviour is propelling the growth of Fintech. The millennial and Gen Z generation are technology-driven. They want the ease of doing business and convenience. They want to travel light without carrying cash. These behaviours have influenced Fintech.

The Central Bank of Nigeria’s (CBN) cashless policy is a boost too. It is fighting the use of cash. This also has led to an upsurge in mobile transfers, QR codes, and USSD. Fintech is transforming the entire banking system from a branch-specific process. Fintech is now a lifestyle. If you do not have a mobile app, you are a dinosaur. The banks rely on it to increase their profit margins. To improve their functions. To close branches.

From The sideliner

When did you visit the bank last?

I cannot remember. That is a long time.

Does it mean you have closed your bank account?

No. I have a high priority.

What could that be, please?

An application manages my finances.

What is that?

Aduk.

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