The Governor of the Central Bank of Nigeria (CBN), Mr. Olayemi Cardoso has rallied monetary authorities in the West African Sub-region against money laundry.
In an address at the 10th meeting of the College of Supervisors for Non-Bank Financial Institutions (CSNBFI) in the West African Monetary Zone (WAMZ), in Abuja, he noted the growing trends in the Fintech space and its risks to financial stability globally.
Represented by the Acting Director, Other Financial Institutions Department, Mr. Abayomi Arogundade, Cardoso said, “We must continue to push forward the agenda of strengthening the anti-money laundering practices; deepening supervisory capacity on cybersecurity and Fintech regulation; and the implementation of risk-based supervisory approach.
“We reiterate the importance of monitoring trends, risks and innovations of NBFIs/OFIs as their increasing transaction volumes pose major financial system stability risk.”
On Fintech loans, the CBN boss said: “Fintech loans is one of the most commonly reported innovation. While overall this may appear small in relation to the size of credit by Deposit Monetary Banks, DMBs, some jurisdictions globally, have noted a growing trend in the volume of these loans.
“In many cases, Fintech credit is provided via electronic platforms that connect lenders to borrowers – in which case the platform takes the role of a financial auxiliary.
“In some cases, however, loans are taken on the balance sheet of these platforms (even if it is short-term), in which case the platforms are akin to new types of financial intermediaries. These entities are typically Fintech firms that offer applications, software, and other technologies to streamline mobile and online banking.”
He added that in many jurisdictions, digital firms had banking licences and are subject to prudential requirements or they may just be regulated as Fintech payment service firms, adding that innovations linked to crypto or Stablecoin assets were also reported by some jurisdictions.
Cardoso urged greater cooperation among regulatory bodies in the sub-region in order to address cases of exploiting innovations in the industry to hurt members of the public and institutions.
