Central Bank of Nigeria ( CBN) has signalled plans to address the challenges of regulating Financial Technology Companies (Fintechs) with the creation of regulatory sandbox.
A sandbox is said to be a type of software testing environment that enables the isolated execution of software or programmes for independent evaluation, monitoring or testing. (Techopedia)
Aishah Ahmad, deputy governor, financial systems stability directorate, CBN, notes that Fintechs are constantly evolving, with new players emerging on the scene and introducing so many apps that are disrupting savings, lending and a lot of other things.
Speaking at the ongoing fourth Nigeria Fintech Week (NFW 2020), she narrated how she regularly got text messages from her friends and associates seeking to confirm if some Fintech firms carrying out business in the country were licensed by the CBN. With the sandbox, the regulator will be able to address the issue, she said.
While in Washington two weeks ago, she said the CBN looked at moving from regulation by identification to more around regulating their activities of Fintechs.
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“As we speak, we are working on a regulatory sandbox. That is what I tell my friends that send me the text messages; don’t worry, we are looking at all of these companies. This is because if you don’t understand what the participants are doing, it is very difficult to make a regulatory response that is fit for purpose,” she said.
She noted that regulatory agencies in many parts of the world were trying to come up with a regulatory framework that would keep up with innovations in the Fintech space.
“On Fintech, the conversation was around what the industry can do to bring in the 1.7billion people that are financially excluded around the world. Most of them are located either in Africa or in developing economies,” she said.
In March 2018, the CBN in collaboration with the Nigeria Inter-bank Settlement System ( NIBSS) disclosed plans to create a regulatory sandbox that allow the startups Fintechs companies test their solutions in a controlled environment.
The 2020 Nigerian Fintech week, with theme, “Surviving with Fintech Innovaton, what are the sustaining factors?” brings together organisations and individuals in the disruptive technology ecosystem both within and outside Nigeria.
The CBN deputy governor commended the Fintech Association of Nigeria and its president, Segun Aina, for organising the event and said the CBN would continue to take very seriously its primary mandate of ensuring financial system stability.
