In an era when Bigtech companies are moving into banking and finance, Nigerian banks are often regarded as laggards.
For instance, while more financially buoyant banks focussed on investing in treasury bills and government securities, Bigtechs, FinTechs and Microfinance Banks are seenramp up retail lending.
Little wonder then that Financial Stability Board (FSB)- an international body that monitors and makes recommendations about the global financial system- says that BigTech – companies like Amazon, Alibaba and Uber that use platform technology to deliver services-may be a greater competitive threat to banks than fintech, given that these companies “typically have large, established customer networks and enjoy name recognition and trust.”
FSB notes that BigTech has already made a significant impact in a short period of time. This is in large part due to their ability to harness data it has accumulated to revolutionise lending models – and lend on a huge scale.
To corroborate this, Martijn De Jong, Co–Head, CCIB Digital Channels and Data Analytics at Standard Chartered, observes that
“Amazon lent $1 billion to small and medium-sized enterprises (SMEs) in 2017, while Ant Financial’s MYbank had RMB31.6 billion ($5 billion) in outstanding loans at the end of 2017, primarily to SMEs. This is in contrast to banks, which struggle to make the most of the data they own”.
Back home, the Nigerian banks are said to be playing…