By Bisi Bamishe
REMARKS BY THE COMMISSIONER FOR INSURANCE, Mr. O. S. THOMAS AT THE FINTECH CONFERENCE 2023 HELD AT RADISSON HOTEL, IKEJA LAGOS ON APRIL 27, 2023
Protocol,
It gives me great pleasure and indeed an honour to be invited as the Chairman of the occasion, where crucial topics that centres on correlating two critical variables; Technology and Financial Inclusivity which are important variables for scale, spread, growth and development of any financial sector, more importantly, the economy.
It is therefore welcoming to be afforded the opportunity to listen to stakeholders as we discuss the theme: “Imperative of Fintech in Promoting Financial Inclusion in Nigeria”.
Financial Inclusion according to Global Partnership for Inclusion (2011) ‘is a state in which all working age adult have effective access to credit,savings,payments and insurance from formal providers. Effective access involves; Convenient & responsible service delivery, at a cost affordable to the consumer & sustainable for the provider (Demand & Supply Side) with the Result that the financial excluded becomes included.
It is worthy to state that financial Inclusion has assumed a CRITICAL DEVELOPMENT POLICY PRIORITY in Nigeria with the National Financial Inclusion Strategy (NFIS) which was aimed at reducing the exclusion gap to 20% at the end of 2020.
The reality of present times is that data provided by EFInA from its two yearly Survey on Access to Financial Services in Nigeria revealed that although some progress has been made, as those financially excluded has reduced from 52.2%(45.5m) in 2008 to 36%(38m) in 2020.This simply means we may not reach the NFIS target until 2030.
It appears that that NFIS,FINTECH,INSURETECH & CURRENT FINANCIAL SERVICES have their shortcomings to the group of people we claim to provide for, there is therefore the need to REVAMP NFIS to capture current realities and come up with new strategies to navigate through certain concerns or challenges.
Part of these concerns includes; whether the existing Fintech/Insurtech business models and products are suitable and sustainable for the unbanked and why the Nigerian Financial Inclusion rate is lower than that of some other developing countries despite numerous programmes.
There have also been certain challenges that have in recent times stifled the NFIS Goal; these includes financial literacy levels (Rural areas), Payment System Laws, and lack of collaboration/partnership between various stakeholders and even Regulators.
Ladies and Gentlemen the journey to Financial Inclusion goal can only be speeded up by encouraging the scaling on Technology particularly Mobil Money and research has shown that Phone Ownership in Nigeria has increased with at least one person in a household owning a mobile phone (EFina 2018 Survey).
There is also the need for Regulators (CBN, NAICOM, PENCOM, NCC, and SEC);
To create open and level playing field for a wide range of providers,
Increase collaboration between themselves as this create the right environment for technology to thrive,
Encourage innovation around product, services and delivery channels
Support projects to improve data and technical expertise
Encourage collaboration and information exchange between various stakeholders
Review primary laws and regulations
And put in place necessary Safeguards
As a subset of the Financial Services Industry, Insurance industry as a responsibility to guarantee the sustainability of growth and development of the economy and we consider technology as a key driver for market development.
It is in furtherance of this that the Commission has invested heavily in automating its processes as well as facilitated the space for financial inclusion growth in the industry. This is in order to accelerate the Insur-Tech eco-system.
We live in a dynamic age, where the application of technology does not only enhance businesses for profit maximization but also now serving as a disruptor to existing business models;
Technology as a Disruptor when considered in relation to; Cloud Computing, Mobile Computing, AI, Blockchain Tech, IoT, Data Analytics, Usage Based Insurance (PAYD, PHYD) using Telematics, is the new market platform; For instance, Telematic has been identified to be disrupting the Insurance Sector by basically altering how risks are evaluated and premiums defined.
The digital transformation of the Commission has also witnessed stages of progressive reforms spanning from upgrade of our IT infrastructures (Data Centre, EDMS, ERP, Portal and Digital Chat-bot), to Automation (of Support, Technical, Industry Processing) and now to Partnership with FSD Africa on Bimalab Accelerator Program, R3 Lab (Risk Resilience and Regulatory Lab) and review of our Web Aggregator Guidelines that had been released and facilitated licencing of applicants.
Also, in addressing the financial inclusion gap in the insurance Industry, the Commission introduced the Microinsurance Guidelines and licensed 8 microinsurers; released Takaful Guidelines and licensed 4 Takaful Companies; recently released the Bancassurance and the Web Aggregator Guidelines that has attracted many applicants and some licenses have already been issued.
Ladies and gentlemen, the future of Fintech started yesterday and InsurTech is now here
NAICOM hopes that the conference will re- energize the national inclusion policy that fully meets stakeholders needs which is to strengthen inclusion for the unbanked or under banked segments.
Financial Inclusion researches/data has shown that its nature, form and challenges differs amongst countries and cannot be addressed with a SINGLE PRODUCT OR ONE SIZE FITS ALL APPROACH.
We should therefore implement technology initiatives that takes into consideration the peculiarities of the Nigerian environment and most critically the LOCAL PEOPLE
I therefore welcome you to this Conference and wish you all a fruitful deliberation.
O. S. Thomas
Commissioner for Insurance
