Nigerian Fintech Week Day 2: How failure drives innovation in Nigerian fintech

Written by Stephen Agwaibor

In the keynote address on the second day of the Nigerian Fintech Week, the message was clear: despite challenges, failure is a “learning opportunity” in the fintech sector. The keynote speaker, ‘Deremi Atanda, MD of Remita, emphasised the importance of failing fast and viewing it as an opportunity for rapid learning and innovation. He highlighted the need to embrace experimentation, foster a risk-tolerant culture, and reframe failure as a chance to learn.

Atanda reinforced his point, stating, “Today’s big names leveraged their failures. Remita, once a failed project, now processes over $50 billion and millions of transactions, thanks to our tier-one licence from a failed project in 2005, our bid for the pension project.” He emphasised the capacity to innovate despite setbacks, urging fintech companies to accept their failures, learn from them, listen to feedback, assess market conditions, and build resilience.

Reimagining AI for the future of payments

In another session, Premier Oiwoh, MD and CEO of the Nigeria Inter-Bank Settlement System (NIBSS), discussed the future of payments with AI. Nigeria’s progress in areas like mobile penetration (around 89%) and a 64% financial inclusion rate has led to growth in e-commerce, with a forecast of digital payments reaching $24 billion by 2027. To make payments seamless and enhance open banking inclusivity, Oiwoh stressed that AI will play a pivotal role.

Aiwoh outlined AI’s applications in payments, including improving security and fraud protection, AML features, providing credit and virtual loans, algorithmic trading, process automation, and personalised customer experiences with humanoid cast services. However, challenges in AI adoption exist, such as the desire for real human interactions, risks of malicious actors exploiting AI systems, and data quality concerns.

To solve these challenges, Oiwoh noted, requires multi-factor authentication, improved regulations, continuous AI training, and efficient data warehousing. Aiwoh emphasised that data should complement AI, not compete with it.

The fireside session, led by Tiwa Osazuwa of AELEX, discussed AI regulatory frameworks in Nigeria. While some guardrails like the Nigeria Data Protection Act (NDPA) exist, there is a need for more comprehensive regulation regarding intellectual property, data protection, automation, and ethical issues related to the use of AI. The panel highlighted the immense potential of AI but stressed the importance of oversight to prevent misuse. Another takeaway point from this discussion was that it’s still early days, with a call to action for African tech enthusiasts foraying into the AI to not just dwell on the downstream but aim higher as there’s still opportunity for Africa to position itself as a leader in this fast-growing niche.

Other matters relating to generative AI and presentations highlighting AI’s role in the creative economy—such as the creation of music—were on display, providing a glimpse into the endless possibilities available with AI that extend beyond fintech.

Other highlights

In a session on economic inclusion and fintech’s role in bridging the gap, led by Funsho Oyelohunnu, CEO of Horizonpay, embedded finance was highlighted as one way to integrate financial services into non-financial sectors, fostering economic inclusion. By embedding features like payments, lending, rent, insurance, and savings for underserved populations, more people can access services previously out of reach. They noted that trust issues in traditional banking still contribute to a high unbanked population despite mobile phone ownership of 81% of adults population.

Fintech platforms were tasked with education and awareness creation, developing diverse products for marginalised groups, and instituting aggregator structures in remote areas. Partnerships with regulators to onboard unbanked individuals and trust-building through safety nets to reduce charges for low-income earners were recommended.

The conference also touched on fintech’s future roadmap, featuring input from consulting firms like McKinsey, Deloitte, KPMG, and EY in a fireside session led by Jameelah Sharrief-Ayedun, CEO of CreditRegistry.

The state of VC funding on the continent was discussed, with a forecast of reduced funding in the near to medium term due to economic challenges, policy flexibility, the Silicon Valley Bank’s crash, and its impact on the fintech ecosystem, all of which, they revealed, contributed to a 49% dip in funding year on year.

Despite these challenges, the panel expressed optimism, noting that pockets of fresh investment signal a positive long-term outlook, hinging on efficiency, lean practices, and policy nudges to regulators to attract foreign direct inflows to Nigeria and the broader African continent.