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Recent business trends in the industry have seen banks and fintechs collaborate to solve problems for each other.

Why banks should care about fintechs

We have seen that they are here to stay; they are no longer just upstarts. If you think in terms of revenue or valuations of customers, they are fintechs in Nigeria that get more than $100m in revenue that did not exist five years ago.
You think in terms of valuation, there are at least three fintechs in Nigeria that have crossed a $100m valuation mark.

1. Unrivalled customer satisfaction

No need to think about what people will use. I don't have these numbers for banks in Nigeria, but I think it will be an interesting experience if we do the NPS score for Nigerian banks and the NPS score for some of the Fintechs.

2. Faster growth

These companies grow really really fast. Like I said, companies have achieved $100m in revenues in less than five years. They don't do committees to make decisions; they just do it when they feel like it and move very fast.

3. Age of super fintech

We also feel that there will be consolidation in the sector. If you think it's becoming annoying to compete with a small fintech company, imagine when the super ones come.

Why fintechs should care

1. Licenses and regulatory strength

Like how do you deal with the regulator? A lot of fintechs don't have that because they have not been around long enough.

2. Lots of (unhappy) customers

That's a good way for you to go help the bank. Either help the bank or take them away.

3. Lots of money (the profit type)

It's the one I call the profit type. Banks know how to run PNLs; they've run these businesses, they have profits, they have this money, and they typically have to either reinvest this money or pay it out in dividends. What tends to happen is that they mostly pay it out in dividends.
Fintechs should go to them, helping them out with that profit and putting it into good use.

Danielle - Fincra Editorial

Author Danielle - Fincra Editorial

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