ISPON President, Chief Pius Okigbo, made this call and
commended Nigerian banks for their foresights in funding various tech startups
in the 1990s and 2000s such as Interswitch, ValuCard (Unified Payments
Limited), ATMC, NIBSS, Credit Registry and CRC Credit Bureau, all financed by various
consortia of Nigerian banks.
According to him, as technology startups increasingly
penetrate traditional banking segments, including payments, wealth management
and billing, major global banking giants are not sitting on the sidelines. Six
major American banks - Bank of America, Citigroup, Goldman Sachs, JPMorgan
Chase, Morgan Stanley, and Wells Fargo - have made strategic investments
in 30 technology companies since 2009, according to CB Insights data.
ISPON suggested that a second wave of investments in tech
startups would require the establishment of Special Purpose Vehicles [SPVs]
following global precedents, as was the case with Citi Bank that incorporated Citigroup Venture Capital business through which it invested in i-Flex
Solutions Limited, driving the "FLEXCUBE' suite of products to
adoption by more than 100 financial institutions in over 40 countries.
Okigbo also said the six major American banks have invested
in 30 tech companies since 2009, according to CB Insights data.
Out of the six banks, he said, Citigroup has been the most
active primarily through its Citi Ventures, which has invested in tech
startups ranging from Betterment, Jumio and Square. Goldman Sachs has already ventured into financial tech startup with thematic investments across
payments technology and big data finance.
Therefore, ISPON urged the banks to study how Deutsche Bank
is building a strong ecosystem for innovations and take a lesson from it.
Deutsche Bank would open three innovation laboratories in Berlin, London and
Silicon Valley, as part of a EUR1 billion spend on digital initiatives over the
next five years.
The giant German bank, Okigbo pointed, would help the
organisation to develop new products and services from three global tech hubs,
strengthening its ability to innovate and deepening relationships with smart
tech startups.
“Nigerian banks should take advantage of the huge innovation
awakening that is sweeping across Africa and particularly Nigeria to refocus
their plans and place their bets on fintech startups. It is particularly sad
that no bank is participating in DEMO Africa, a flagship launch pad for
emerging technology and trend hosted in Lagos in 2014. Many venture
capitalists from around the world were present”, Okigbo said.
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