The Managing Director, Financial Derivatives Company Limited, Bismarck Rewane, has said the competition in the financial sector is mainly between the banks and telecommunication companies.
Speaking during a television programme monitored yesterday in Lagos, Rewane, an economist and financial market expert, said the competition had increased as mobile payment system gained more acceptance in the industry.
He said despite the challenges and competition faced by banks, they have remained resilience in their operations.
Rewane said: “Nigerians banks have shown resilience despite challenges facing the industry. However, they are going to be cannibalised by Financial Technology (Fintechs) companies as well as telcos. I think to a large extent, some banks are underpriced.”
But they have to confront competition from the telcos, which are the most ruthless competitors and the mobile payment system has given them an advantage.
MTN Nigeria has received final approval from the Central Bank of Nigeria to run a payment service bank.
With this approval, MTN Nigeria can provide the services offered by conventional commercial banks with the exception of granting credit and processing foreign exchange transactions.
The CBN had also granted Airtel Mobile Commerce Nigeria Ltd, a subsidiary of Airtel Africa, a full super-agent licence.
The licence, according to the telecommunications company, allows it to create an agency network servicing the customers of licensed Nigerian banks, payment service banks and licensed mobile money operators in Nigeria.
Already, the Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele believes the speed and innovation occurring in the payment system calls for enhancing regulations to keep up with the trend. The CBN said it has taken steps to increase the regulation of Fintech companies.