COVID-19: How Fintech enabled efficiency in financial sector, yet posed challenges to regulators, customers – NDIC MD
The Managing Director/Chief Executive Officer, Nigeria Deposit Insurance Corporation (NDIC), Mr. Umaru Ibrahim on Monday said the adoption of Financial Technology (Fintech) by financial institutions especially during the novel coronavirus (COVID-19) lockdown pushed for a nationwide patronage of digital financial services which helped bridged the gap occasioned by the virus outbreak.
However, the MD noted that despite the efficiency, regulators and customers faced unforeseen challenges.
Speaking at a three-day workshop themed: “COVID-19 AND FINTECH DISRUPTION: OPPORTUNITIES & CHALLENGES FOR BANKING SYSTEM STABILITY AND DEPOSIT INSURANCE” and bankrolled by the Corporation for Business Editors, Finance Correspondents Association of Nigeria (FICAN), Civil Society Organisations (CSOs), microfinance and members of the Association of Corporate Affairs Managers of Nigerian Banks (ACAMB), Ibrahim explained that the impact of the COVID-19 pandemic and the resultant disruptions to social and economic activities had negative consequences on all lives and nations across the world.
According to him, despite the threat of recession, increased national debt, increase in non-performing loans and potential financial crisis has put pressure on regulators to reassess their supervisory activities to strengthen their capabilities to address these challenges and forestall financial crisis.
“The emergence of digital financial services enabled by financial technology (Fintech) has enhanced efficiency in the financial sector but has also posed new challenges to financial regulators and consumers. This became more apparent during the pandemic when the lockdown protocols hindered physical access to financial services, encouraging more Nigerians to rely on digital financial services. Inevitably, the media was also adversely impacted by the pandemic. Our attempts to tackle the erosion of public confidence due to the prevalence of fake news, particularly via social media, became a matter of serious concern,” Ibrahim explained.
The MD also said despite the sudden nature with which the virus crippled economic activity in the nation and indeed the entire world, the Corporation was along prepared to handle the pressure.
In his words: “As disruptive as the COVID-19 has been to other sectors of the country, I would like to humbly state that the NDIC was not caught napping. Based on its robust and proactive Enterprise Risk Management strategy, the Corporation immediately swung into action by activating its Crisis Management Action Plan to prevent any negative impact on the operations of the NDIC and the financial institutions under its supervision. The goal is to ensure the safety and protection of all staff and stakeholders to maintain continuity of its operations towards protecting depositors’ funds and ensuring the stability of the banking sector”
Stating how the corporation under his leadership restored depositors’ confidence despite a restriction on human and vehiclular movement, NDIC boss averred: “In recognition of the heightened fears of depositors’ lack of access to their money due to the COVID-19 disruptions, the Corporation embarked on a nationwide public awareness campaign through the production and broadcast of radio and television jingles in the three major languages and pidgin, to enlighten depositors on the continued safety and security of their funds in licensed financial institutions. The campaign with a total of 1,271 radio slots and television jingles carried out across the six (6) geo-political zones, became imperative to ward-off the panic and the threat of bank run amidst the full lockdown.”
