Doing some research on an article and wanted some assistance. When rolling out digital financial service products, it would seem most banks have two options in terms of the technology:
Build internally and deploy
Acquire Technology (FinTech) and deploy
I already have some examples for approach 1 i.e. Wema bank and Buxme, Sterling Bank and ChatPay can anyone assist with providing an example for approach 2. Is there any Nigerian bank that has actually acquired an existing technology and brought it in-house?
For approach 2, the process and requirements put out by the banks is stringent and hardly can any individual developer meet these except they’re from an established software development firm. The product for example must undergo PCIDSS/PADSS certification and other industry-based standards.
For approach 1 however, it is easier for the banks to go with as the requirements here is not too stringent to meet except for the usual CBN operational license and host bank’s internal control requirement.
Expect the banks to respond very slow. Not much of their fault, but the way the industry is generally. And because of their size. Banks are very great at a few things that Fintech companies might never crack very soon. And banks won’t be able to catch up on all the crackdowns Fintech companies are having on all their various functions and businesses.
What I see is, banks acquiring Fintech startups if they are wise, and these branches becoming experience centers in the long run. Banks’ response with services clone will fail, and most of these Fintech companies without bank backing will not prosper.
Banks have been sitting on data for years. In what ways have they created much value with all that data/information? GT app cannot even remind me of my dstv monthly payment.
Generally, I just think the future(5-10 years from now) is nothing like we know it right now.
there may have already been such an aquisition, though the outcome was not an expereince center in the physical sense. Doing some research on Access Bank and Pay With Capture, I discovered that there was a startup initially just called Capture whose app allowed users to pay for items by scanning a QR code…
Err Banks have responded by being banks…Slow very old and very bureaucratic.
When you look at it logically, a bank is where u store money, recieve money, borrow money and pay money and other financial services are based on this so isnt it possible to disrupt each services from main bank?
Paywithcapture has not succeeded either. One of the mistake they made with Paywithcapture was that it was not simple and the big bang advertising was also too sudden for a product that has not been properly tested and lacking organic users who can push it via word of mouth.
We are not anywhere near where we should be as per fintech.
hmm but they say success if relative, so when compared to other banks attempt at FinTech solutions such as Wema’s BuxMe and Sterlings ChatPay - Access Banks PayWithCapture in terms of number of sheer downloads is by far the most successful.
Making money is the goal especially from the banks perspective, but in the absence of any other metric especially one to measure profitability, just had to settle with downloads as nothing more than a guage / indicator.
Why should they respond at all though? It’s not like any startup is posing a threat to them. Even in the US, despite companies like PayPal and Square being hugely successful, Wells Fargo, Chase, Bank of America and the likes are still making their billions. Not really the same market tbh (as far as needs go). Even more so in Nigeria. tens of millions (perhaps up to 100 million?) of Nigerians have bank accounts. I don’t think there’s 500,000 Nigerians using the services of any FinTech startup just yet (feel free to show me proof if I’m wrong).
Besides, 90% of the money in Nigerian banks is owned by a very tiny 2% of their customers and those guys will probably never use a Paystack or what have you. Mostly because they’re too old for technology.
The thing is …will you support an innovation that is likely to take over your job? That probably is what runs in the minds of the the bank staff saddled with the task of running those products. Innovations such as these, succeed only when the banks partner with the private sector because they don’t want to lose their job, spend money on enhancements as well as make money out of nothing.
Beg to differ…Paga has over 5.8m unique users and ~1m active in any 90 day period and growing. Lets stop peddling wrong information…even if you are not one of the users yet - we hope you will be soon!
I think we will see more partnerships happen. The reality is that the way banks operate today will make it hard for any startup to survive within the bank. Collaboration is king. At Paga we have built a distribution network for financial services and have opened that to the banks. We will announce some collaboration in that area soon…
… got confirmation that Access Banks PayWithCapture app was actually bought and brought in-house. Though since folding the app up into its corporate structure it’s undergone substantial updates. But the underlying tech was externally sourced.
