Digital finance is a mainstay in Nigeria’s tech sector.

A vibrant and youthful environment has buoyed a thriving new market and hence a plethora of opportunities in digital finance in the busy Nigerian fintech sector. Despite the ups and downs that the sub-sector has faced in recent years, it shows great potential to grow in leaps and bounds over the next few years.

In 2022, the digital finance sector in Nigeria handled nearly $ 700 million in digital transactions, which depicts the rapid growth of digital finance in the country.

As previously indicated, the fintech sector in Nigeria has shown great growth over the past few years with digital finance showing commendable favour and growth.

You should also read: Nigeria leads the pack in Africa’s fintech sector & findings anticipate further growth.

Obviously, the enthusiasm waned briefly due to challenges such as the ailing global economy, financial scandals, the oversaturated market and the infamous crypto crash.

But players in the industry perceive these as just passing phases that could have besieged any industry and have expressed optimism of a marked growth going forward. Boasting more than 200 fintech start-ups, Nigeria is a ripe market to sample and execute viable digital finance services as the sector shows great growth and boasts untapped potential.

The latest Tech in Africa report indicates that the next few years will possibly sink or swim for the Nigeria fintech sector. Therefore, market consolidation and sophisticated consumer expectations might be a laudable solution to keep the market afloat and thriving.

Head and regional manager of Nigeria’s West Africa at Backbase, Emmanuel Onyeje, in a recent media statement, indicated that the major players in Nigeria’s fintech sector might have to consider coming together to develop a common strategy to stave off external competition.

Onyeje noted that Telecom companies are making quick inroads into the world of digital finance.

“Fintechs might have opened the door for new venues for financial services to more than 100 million unbanked people in Nigeria,” he is quoted as saying. He added that this development would challenge traditional banks to up their game and improve the streams of service and diversification of digital finance services.”

Emmanuel Onyeje, Regional Manager West Africa and Head of Nigeria

The latest ‘Fintech in Africa,’ report backs these views and points out that the growth of the digital finance sector in the youth market will see the need to further invest in and develop the sector, as many youths are unlikely to have a traditional bank account and prefer to carry out financial transactions digitally, which they view as faster and more efficient than traditional banks which they perceive as slow and archaic.

“The only way for traditional banks to thrive in this sector and enjoy pronounced market share in digital finance is to shed the brick and mortar and suit and tie approach to banking and improve on digitalisation and develop efficient service platforms for clients, which are actually more cost effective and affordable”

There is a brewing competition furthermore as online banking grows and fintechs are already tapping into these opportunities, which over the next few years might see the traditional methods of banking become largely obsolete. This calls for improved digital banking methods to leverage this consumer shift in digitalisation.