Big Banks Enter Fintech Space, Risks For Top Fintech Companies

Nigeria’s big banks are entering the financial technology (fintech) space, which is causing competition for existing fintech firms. 

The banks are making strategic investments in fintech businesses to secure their future. This move threatens the valuation of top fintech firms like Flutterwave, Interswitch, and Opay, which are currently valued at over $1 billion. 

Other fintech companies like Moniepoint and Paga are also establishing themselves in the industry. The big banks, including Stanbic, Access Bank, and GTB, are developing online banking platforms to compete with the fintech firms. 

They are starting to see positive results from their investments in fintech. For example, GTBank’s fintech firm, Squad, became profitable in its first month of operations, recording a profit before tax of N926 million in the first six months. 

Guarantee Holding Company’s fintech arm generated about N139.3 billion in revenue between June and December. 

Keep Reading

Wema Bank also experienced growth with its fintech platform, ALAT, seeing a 131% increase in customers onboarded in 2022. The success of the banks’ fintech ventures is attributed to their retail banking strategies. 

While the banks’ fintech platforms may not compete with the speed of companies like Opay and Moniepoint, they are still bringing competition to the market.

Additionally, Stanbic IBTC Holdings, the parent company of Stanbic IBTC Bank, has changed the name of its fintech subsidiary to ZEST Payments Limited. This rebranding is part of their efforts to challenge other fintech companies like OPay, Kuda, and Moniepoint for market share.

The entry of major banks into the FinTech space in Nigeria could lead to increased competition, a shift in market share, innovation pressure, partnership opportunities, regulatory challenges, and a potential advantage in customer trust.

However, it could also result in more innovative banking services, market fragmentation, resource allocation shifts, and a need for customer education. It will remain to see how well both banks and FinTech companies adapt to the changing dynamics and customer preferences.

Dexter

Recent Posts

Mauritius Reopens Social MediaAccess in Response to PublicPressure

Mauritius on Saturday overruled its decision to prohibit social media until the election onNovember 10th which was caused by a…

November 5, 2024

UAE Crown Prince Arrives in Ethiopia for WorldWithout Hunger Conference

The UAE’s Crown Prince of Abu Dhabi, His Highness Sheikh Khaled bin Mohamed bin Zayed AlNahyan was in Addis Ababa…

November 5, 2024

Zimbabwe’s rich (Mbingas) linked to state looting

Gilbert Machokoto, a former teacher, said that setting up a business in the late 1980s, shortlyafter Zimbabwe's independence, was ‘like…

November 4, 2024

Historic Shift in Botswana as PresidentConcedes to Opposition Victory

Following elections in which the party that had ruled the diamond-rich nation for almost 60years suffered a historic setback. Botswana's…

November 4, 2024

Lightning Strike at Uganda Refugee CampClaims 14 Lives, Including Children

A lightning strike at a refugee camp in Uganda kills 14 people including children with 34 othershospitalized. The incident happened…

November 4, 2024

From television hopeful to red carpet royalty: Kuhle Adams’ journey frompresenter to South Africa’s biggest awards

From TV hopeful to red carpet royalty, Kuhle Adams' journey is a remarkable story of talentand perseverance. Beginning as an…

November 3, 2024

This website uses cookies.