Connect with us

Infotech

Trust: A drive for financial inclusion in the fintech industry

Published

on

By Enoch Deyon Kantan

After the Global Financial Crises (GFC), only 22 percent of American Financial Institutions were deemed trusted. Since then, trust in the financial sector has increased to 33 percent in 2019, and over 50 percent in 2023. Despite this increase, the financial sector world – wide remains the least trusted sector. If the Americans least – trusted the financial sector, how much more is the Africans in Sub-Sahara Africa?

As EFInA survey report reveals, Nigeria’s formal financial inclusion improved to 64 percent in 2023 from 56 percent in 2020, fueled by growth in the banking population and non – bank financial institutions. However, financial exclusion persisted due to poverty and difficulty in accessing services in remote areas.

Due to lack of physical infrastructure in their respective regions from the commercial banks, coupled with cynicism and insecurities in the FinTech Industry, some Nigerians are financially excluded.

As a young startup founder in the FinTech industry, who knows the power of financial inclusion with the impact of the Fintech industry, Nigeria’s financial inclusion landscape has transformed significantly from 2016 to 2023, with formal financial service usage growing from 30 percent to 57 percent. The adoption of financial service agents has also skyrocketed, from 4.4 percent in 2018 to 54 percent in 2023, yet low levels of awareness, limited understanding of product offerings continue to hamper trust in other formal (non-bank) products. I will highlight the Key Drivers of Trust for Financial Inclusion comes 2024:

Of what importance is Trust?

Trust in financial Institutions is widely believed to be important for financial stability. With low trust (a 1 out of 10) customers may decide not to become customers of a financial institution. Distrustful people are less likely to have a savings account than trustful people and have stronger liquidity preferences. Report also reveals that Nigerians continue to rely on physical financial coping mechanisms to meet their goals, address liquidity distress and cope with shocks. Both active physical mechanisms, such as taking on additional work and cutting back on expenses, and passive physical mechanisms, like doing nothing, remain prevalent choices.

What are the drivers of Trust in the financial institutions?

We can categorise different drivers of trust into five groups: Economic Factors (Like Financial Crises), Behavior and Characteristics of Financial Institutions, Consumer Characteristics (like demographic characteristics, their financial literacy, and their economic and political views).

Economic Factors: Trust here moves procyclically . The procyclicality of trust is confirmed by a cross-country analysis for 98 countries: Countries with the largest rise in unemployment also experienced a dramatic decline of trust in financial institutions and banks. The link is strongest in the Organisation for Economic Co-operation and Development (OECD) countries. With the EFInA report of 27 percent Nigerians considered “Financially Healthy” means that Nigeria is expressing a dramatic decline of trust in the Financial Institutions. End-users’ views of general economic situation, their own financial situation and the stability of prices are most important in explaining trust. Financial crises may not only have a direct impact on trust, it can also change the (effect of other) drivers of trust and the extent to which trust matters for financial decisions. For example, The Naira redesign policy advanced digital finance but had broad negative impacts. Businesses and households saw more harm than good. About 70 percent of entrepreneurs reported setbacks, with losses in revenue and market disruptions which hamper trust in the financial institutions. Despite 45 percent of Nigerians used Digital Financial Services in the past 12 months, up from 34 percent in 2020, yet cynicism in the digital financial services persisted. At Softawallet, we will work together with the Government in 2024 to improve the economy by bettering our services and making it swift, reliable and more of customers satisfactory.

Behaviour and characteristics of financial institutions:

Trust in Financial Institutions depends on the behaviour and characteristics of these institutions. Starting with behavior, various studies show that prudent behavior, which is characterised by long-term focus – taking  into account the interest of all its stakeholders – as opposed to short – term profit maximisation, has a positive effect on end-users trust. For example, the big sharks in the FinTech industry have demonstrated high level of trust coupled with high integrity, competence, stability and benevolence. We the startups can learn from their consistency characterized on long-term focus – taking, rather than the short – term profit maximisation sharks that go oblivion.

Softawallet will strengthen her transparency, competence, consistency, stability and integrity with thorough legal backings in 2024 and beyond.

Consumer Characteristics: Apart from demographic variables like age and gender, three characteristics of people have been considered potential drivers of trust in the financial institutions (aside from Financial Crises earlier discussed) financial literacy, political and economic values.

Financial Literacy argues that end – users with more knowledge will be more trustful towards their own financial institution than less knowledgeable end – users. Knowledgeable end-users have better ability to evaluate information and are likely to make better decisions about which service provider to choose. The lack of knowledge may lead to distrust from non-knowledgeable end-users.

Trust in Fintech industry is measured on information perhaps information source. Access to the internet, social media, television, or newspaper may foster trust in service providers because financial institutions use these communication channels to provide information on their products and because authorities use these particular media to disseminate views that boast confidence in the financial system. A significant proportion of formally served Nigerians face challenges related to fraud incidence, poor service, high banking costs, and a lack of clarity in financial information.

Political and Economic values find that people with pro-market economic views i.e individuals who favour hard work and lower government ownership and think that larger income differences are needed as incentives for individual effort – exhibit higher trust than people with negative attitudes towards the market.

At Softawallet, regarding political views, we’ll find relatively high trust levels for individuals who place importance on wealth, on helping society and with greater preference for democracy, individuals and environmental concerns. Also, we won’t relent in digital literacy for youths in expanding our tentacles for Financial Inclusions.

Enoch Deyon Kantan is the Founder of Softawallet Financial Services

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Infotech

Glo urges school girls to aim for leadership

Published

on

Globacom has urged school girls across the country to aspire to leadership positions without fear, despite the various challenges that they may face along the way.

Speaking at the commemoration of the 2024 edition of Girls in ICT Day held in Lagos on Thursday, Globacom’s representative, Mrs Kemi Fadipe, encouraged school girls to pursue their dreams with passion so that they can attain leadership positions in future.

She advised them to prioritise their education to lay a strong foundation for leadership roles and also seek mentorship and guidance from successful women, as well as build a network of supportive peers, teachers, family members, and mentors who believe in their potential.

She also advised them not to shy away from volunteering for leadership roles in projects, clubs, or community initiatives. “Taking on responsibilities demonstrates initiative, builds confidence, and showcases leadership potential,” she said, adding that “they should also step out of their comfort zones, embrace new experiences, and view setbacks as opportunities for growth and learning.”

“Today, in an era defined by rapid technological advancements and innovation, encouraging girls to pursue STEM education (Science, Technology Engineering and Mathematics) is not only essential for their individual development but also crucial for fostering gender equality and driving societal progress,” she noted.

She added that “STEM education fosters a lifelong passion for learning and a growth mindset—a belief that intelligence and abilities can be developed through dedication and hard work. Fantastic leaders continuously seek knowledge, adapt to change, and inspire continuous improvement.”

Citing several examples of women with STEM backgrounds who have attained positions both in Nigeria and beyond, Mrs Fadipe observed that their exceptional leadership skills, resilience, and dedication have made them “serve as inspiring role models for future generations of female leaders in Africa and beyond.”

The event had in attendance secondary school students from selected schools in Lagos and Ogun states.

Continue Reading

Infotech

NITDA, CISCO ink MoU to boost digital transformation in public, private sectors

Published

on

The National Information Technology Development Agency has signed a Memorandum of Understanding, (MoU) with the Cisco System Incorporation to advance Nigeria’s digital transformation. Cisco’s Country Digital Acceleration (CDA) Programme is a global initiative that partners with government and private sector leaders to develop sustainable, secure, and inclusive communities powered by ethical and innovative technology solutions.

The partnership aims to unlock the value of digitalisation in Nigeria and drive an inclusive future. The Federal Government is collaborating with Cisco, industry, and academia to accelerate the national digitisation agenda by implementing pilot projects in five key areas: Repurposing NCAIR to create an AI and Cybersecurity Experience and Incubation Center; Establishing a Broadband Innovation Centre; Setting up a Smart Agriculture Demo Farm; Designing and deploying Technology Learning Hubs; and Incubating Defense Technology Solutions.

This partnership aligns with President Bola Ahmed Tinubu’s priority areas of accelerating diversification through digitisation and innovation, strengthening national security for peace and prosperity, and boosting agriculture to achieve food security.

Speaking during the signing of the MoU at the NITDA Headquarters, Abuja, the Director General, Kashifu Inuwa, CCIE maintained that AI and Cybersecurity go hand in hand, this has made it imperative to upgrade the NCAIR to a world class AI Lab because as “we develop the AI, we also need to develop and design it with a security in mind.”

On the second initiative, the NITDA boss noted that broadband is the backbone to digitisation and digital transformation, and it provides the connectivity needed for transformation adding that the establishment of the innovation hub would encourage local startups and companies to come up with affordable broadband solutions in Nigeria by using cutting edge technology.

He said, “We have a National Broadband Plan that aims to achieve 95 percent broadband coverage in Nigeria, and we need to be smart in the way we do things in order to achieve the target.”

According to Inuwa, the initiative on smart agriculture would help to improve food production and productivity in agriculture, noting that the use of Internet of Things, IoT, Drones and other technologies would enhance productivity in agriculture.

He said, “As part of the Presidential Redefined Priority Areas of achieving food security in the country, the President has mandated the cultivation of 500,000 acre of land in the country and to achieve this successfully and efficiently, we need to use technology.”

The Director General expressed the willingness of the Agency to work with Cisco to establish a pilot of the Learning Centre adding that it is part of the Agency mandate to deploy IOM technology to the under-served and unserved areas.

He said, “Cisco is already working with International Organisation for Migration, (IOM) for a pilot project in Maiduguri, Borno state capital to deploy three Learning Centers using Cisco technology. So, we want to see how we can partner to also scale up that initiative, because we also have as part of our mandate to deploy this technology in under-served and unserved communities.”

In his remarks, the Cisco’s Country Director, Mr. Clayton Naidoo expressed that Nigeria would benefit from the MoU as it would improve agricultural production, create job opportunities, and increase the financial strength of the citizens.

“What we want to do is we want to make sure that we leverage technology to bring the right level of economic opportunity to Nigeria that will contribute towards economic growth and job creation. So that will be the first programme.”

According to him, Cisco has been unpacking the National Digital Agenda of the country and noted the Strategic Roadmap and Action Plan which are in alignment with the Cisco programmes, resources, technology and investment.

“And we try to implement pilot projects to ensure that we can help advance the acceleration of that digital plan,” he added.

While reacting to each of the initiatives, Mr. Naidoo disclosed that Cisco is at the vanguard of Cybersecurity and Artificial Intelligence and will partner with NCAIR to build an experience centre in the country by using the experience.

According to him, the experience centre will be designed to support organisations across Nigeria, building robust Cybersecurity and AI architectures which would be done through labs, design thinking rooms, and equipment that can test models.

While noting that Cisco intends to build a world-class experience center that would benefit all parts of Nigeria, the Country Director reiterated that “we are looking to bring the power of the Cisco business unit into the space using technology.”

“This is our immersive video technology using our platform called WebEx, where we can bring the power of those subject matter experts into Nigeria to collaborate and design together,” he emphasised.

He said the company will also build a broadband innovation hub with Galaxy Backbone in partnership with NITDA. He noted that the initiative is in alignment with the National Broadband Policy that was outlined by the Minister. He disclosed that Cisco would work with IXPs and various service providers to help them build networks that can serve underutilised communities or marginalised communities.

“We believe that with the technology that we are going to build, we will leverage the right level of platforms that will ensure that the internet economics are right. Because there is one thing building on technologies but if the technology is too expensive for service providers, they won’t be able to offer that into marginalised communities.”

While assuring that Cisco has an IoT team that builds sensor technology, he said the company will build a use case around smart agriculture using some agricultural bots and drone technology.

He commended the Agency for the partnership disclosing that Cisco is really focused on it. He said the work will start immediately.

“We are really looking forward to the partnership and as Cisco, we believe in creating inclusive models that empower local communities and empower all citizens of Nigeria.”

The highlight of the event was the visitation to a demo smart farm at the Abuja Technology Village.

Continue Reading

Infotech

MEA 2024 returns with LG Electronics’ showcasing latest innovations

Published

on

LG Showcase MEA 2024 yesterday welcomed guests and partners in Abu Dhabi to in-person experience the latest and greatest the brand has to offer.

The two-day event held at Conrad Abu Dhabi Etihad Towers Hotel in Abu Dhabi, UAE had over 500 guests who witnessed all of LG Electronics’ new innovations that will be rolled out in the region. The LG Showcase, returning after a successful event last year, will create a common platform for experiencing LG Electronics’ unique customer-focused innovations and reaffirm the company’s vision to bring innovative products to the market that enhance the customer’s overall experience. The event revolved around the theme of Reinventing Together, which expresses the brand’s commitment and passion toward its customers and their requirements.

Mr. Il Hwan Lee, Chief Executive Officer, LG Middle East & Africa (MEA) Region said, “We saw a huge success when we returned to the LG Showcase MEA event last year and we are elated to see the same success in today’s event as well. It is a great pleasure to showcase our latest innovations and give our guests the chance to experience them all firsthand. We are happy to see the love and appreciation received for each product and look forward to bringing more to this region overall.”

He further added, “This event is a platform that showcases not just our products, but also reiterates our commitment to our customers. This event also serves as a platform for networking with our business partners and fostering relationships, another vital element of our work.”

The large-scale event was also home to multiple exhibition zones, where LG Electronics’ products were displayed in their ideal use-case scenario. This included a hero zone with the 97-inch LG SIGNATURE WIRELESS OLED M, the world’s-first consumer TV with Zero Connect technology which enables the transfer of 4K video and audio, wirelessly at 120Hz.

Also, on display was LG’s innovative StanbyME Go, the 27-inch FHD smart screen that comes in a carry bag design and a three-hour battery built in that allows for the ultimate in portability and making it a perfect companion for outdoor use, such as picnics and BBQs. The event highlighted the latest in LG Electronics’ innovation in processors and software with the new á (Alpha )11 processor that will be used in its flagship TVs and the latest WebOS respectively.

The á (Alpha )11 processor will be actively used in flagship TVs for powerful AI features that enhance the viewing experience, while the new WebOS brings a revamped home screen with wider title cards and smoother tiles. The new WebOS will expand into 300 TV brands and 3,500 content partners, including local partners and has an active user growth increase in the MEA region by 20 times.

A dedicated zone for audio visual products was also present, including the latest in XBOOM speakers which deliver bold and loud sounds with strong bass. This included the LG XBOOM XL9T, the most powerful-in-class party speaker, its smaller variant, the LG XBOOM XL5S with a 200W output, topped off with a dynamic pixel lighting effect that offers animation patterns, visual EQ or even characters, making it the perfect accessory for hanging out with friends or a must-have at parties.

The exhibition zone also included an area for home appliances, including washing machines and air conditioning solutions as well as the brand’s premium built-in solutions. Featured in this zone was the MoodUP™ refrigerator, which adds a unique personality to any home kitchen with the ultimate in customization by allowing users to choose from 22 colors for the upper door panel and 19 colors for the lower panel.

Also, on display was the LG built-in-kitchen package, a unique lineup that comprises an InstaView™ oven, QuadWash™ dishwasher, bottom-freezer refrigerator and microwave oven, making it easier for customers to build an all-inclusive experience powered by LG Electronics.

On display was also its Residential Air Conditioning units, such as the ARTCOOL lineup which features the LG DUAL Inverter Compressor™, a critical element that brings powerful cooling without affecting efficiency. Also, on display was LG’s new WashTower™ Compact laundry solution, which focuses on efficiency and space by combining both a washer and dryer with an all-in-one control panel and advanced AI in a single unit with a capacity of 13 kilograms for the washer and 10-kilogram capacity for the dryer.

Speaking at the event, Mr. Hyoungsub Ji, Managing Director, LG Electronics West Africa Operations said, LG is committed to bringing the latest innovations and cutting-edge technology to the West African market. “Our showcase highlighted our newest products and solutions, which will soon be available in the region. We are dedicated to enhancing the customer experience through our expanded retail presence, improved after-sales service, and engaging brand activations.”

On LG CSR activities, he said LG is passionate about empowering the local community through CSR initiatives, focusing on providing water to as many communities in Nigeria every month.

LG Electronics also set up Life Style zones, with a range of products appropriate for them. This included the ThinQ powered home setup, an elegant café setup as well as a camping setup.

For more details about LG Electronics’ range of products please visit: https://www.lg.com/africa

Continue Reading

Trending