The Director Payment System Department of the Central Bank of Nigeria (CBN), Mr Samuel Okojere has said that competitions in the financial industry enhances innovation and provides the customers more options usually at lower cost.
Okojere, who made this statement in Lagos at Chartered Institute of Bankers of Nigeria Breakfast forum said that competition is healthy for economy.
He said that Payment Services Banks introduced recently expected to enhance competition and deliver value to customers especially those who have hitherto being unbanked.
He said various studies have indicated that improved access to financial services improve economic growth and development, stressing that the primary benefits of PSBs was to achieve the financial inclusion target and increase access to financial services by more Nigerians.
The director said that PSBs are not expected to extend credit but their activity would provide basis for banks to collaborate and channel credit as may be necessary, to stimulate economic activities at the grassroots through provision of financial services, adding that as PSBs commences business, the overall deposit base of the banking industry would further diversified.
In his keynote address on “the implications of Payment Service Bank in Nigeria” he said I am convinced that the introduction of PSBs to the banking industry holds more promise for all banks. We are going to have a better diversified industry and the banking industry is poised to positively impact on improving the productivity of our people especially those in the informal sector”
He said PSBs will evolve from telecommunications companies, fast moving consumer goods companies, chain store and postal services, hence there was nerd to ensure that we ramp up capacity in the industry.
Also speaking, Director CIBN Centre for financial Studies, Professor Olalekan Asikhia said the establishment of PSBs pose a threat to the traditional and reactive banks as they challenge their position and roles.
He said despite the numerous opportunities and benefits of the introductions of PSBs, it has some challenges.
He said one of the such challenge is on boarding, unserved and rural cusyomers who lacks access to basic telephone service or the knowledge of the same as they may be novice to digitized solutions offered by PSBs.
He urged banks to seize the growth opportunity in payments by investing in technological innovations, defining new operating models and partnering with FinTech start-ups and other relevant institutions.
He however warned that banks that fail to move quickly may risk being left behind.
