Regardless of the industry, the adage “technology moves faster than regulation” will always be accurate. Regulation frequently lags behind innovation, whether it is in financial services, self-driving cars, or generative AI.
Regulators have often had to react to the quick speed of fintech innovation in Nigeria’s financial services industry. For instance, businesses like MTN were already collaborating with financial institutions to enable users to open bank accounts prior to the Central Bank of Nigeria’s 2018 introduction of rules for Payment Service Banks.
For MTN’s MoMo to legally take deposits, store money in electronic wallets, provide savings products, enable person-to-person transfers, and offer PoS and ATM services, the PSB license was essential. Additionally, it made it possible for MoMo to increase the number of physical banking agents it uses for withdrawals, payments, and deposits. The licence for Payment Solution Service Providers is no different.
Prior to the CBN issuing the licence rules in 2020, payment gateways such as Flutterwave and Paystack were in place. In the financial services industry, licenses and regulations are crucial because they guarantee that businesses function within a framework that safeguards customers, upholds confidence, and supports the stability of the economy. However, because they work at different speeds, entrepreneurs and regulators frequently find themselves at odds. While authorities adopt a more cautious approach to guarantee consumer safety and financial stability, fintech companies are always pushing the envelope, introducing new technologies and upending established procedures.
The secret to creating a financial ecosystem where technology can thrive without jeopardising security and confidence is finding a balance between innovation and regulation. Zone is a business that is leading the way in this area. In addition to developing innovative solutions to improve financial services in Nigeria, Zone is also rethinking how innovation can coexist peacefully with regulatory monitoring and compliance.
Zone’s solution has been dubbed the most revolutionary financial technology in Nigeria since the establishment of NIBSS and is the first of its type in Africa. To facilitate regulation and foster financial innovation, the company is utilising its controlled blockchain network. Financial institutions on this network have better payment processing capabilities thanks to this blockchain-powered payment infrastructure network.
BrandSpur banking and finance news desk reports that payment procedures are enhanced by the decentralised design, which makes them quicker, safer, and more economical.
