First Bank Fintech 5.0: Unveiling benefits, challenges and prospects of Open Banking




First Bank MD/CEO Dr. Adesola Kazeem Adeduntan

Ahead of the First Bank Fintech Summit 5.0 coming up Thursday and  themed “Open Banking and Its Derivative Opportunity for the Financial Ecosystem,”  AMAKA IFEAKANDU looks at  some of the benefits, challenges and prospects of open banking in Nigeria.

 The advancement in the technology has placed the Nigeria banking industry on the fast lane to adopt different innovation to provide excellent services, meet the needs of customers and remain relevant in the world’s financial system

And characteristic of the organisation, Nigeria’s premier and leading financial service provider, First Bank of Nigeria Limited, is not left out in this transformation process.

In its transformation drive, the FBN announced the 5th edition of its Fintech Summit for 2021. The summit which started in 2016 has become an annual tradition that the bank’s operators, investors and the entire stakeholders look forward to every year.

Interestingly, the event is  targeted towards bringing together the finest and most innovative experts who are at the forefront of digital innovation both locally and globally.

The First Bank Fintech Summit from inception has been a physical event with attendance of about 1000 participants. It, however, became an online event in 2020 owing to the COVID-19 pandemic that ravaged the global economy. 

Fintech Summit 5.0

Announcing the 2021 summit, the FBN management said this year’s theme tagged ” Open Banking and Its Derivative Opportunity for the Financial Ecosystem” was selected against the backdrop of the increasingly prominent role open data, artificial intelligence and cloud-based technologies are playing, not just in the broader tech-space, but more specifically in the financial services and financial technology landscapes.

It noted that the increasingly pervasive intersection of these variables in various aspects of human enterprises represents a powerful force for the creation of new ventures through a new gateway that will promote unlimited value creation or innovation.

The bank  views open banking as representative of such an intersection, setting its roots down in the financial services space but embodying the transformative potential capable of redefining customer satisfaction across the entire landscape of the financial ecosystem.

This according to the bank shall form the pivot of the conversations around this year’s summit.

What is Open Banking?

Open banking refers to how financial institutions and third-party providers leverage open Application Programming Interfaces (APIs) to share data in a standard format to drive open, transparent, innovative and competitive banking services.

It is also a banking practice that provides third-party financial service providers open to consumer banking, transaction and other financial data from banks and non-bank financial institutions through the use of Application Programming Interfaces (APIs).

Benefits for businesses and others

Apart from allowing the networking of accounts and data across institutions for use by consumers, financial institutions, and third-party service providers, open banking in today’s banking is becoming a major source of innovation that is poised to reshape the banking industry.

Besides, it offers a lot of benefits to financial service providers, businesses and banking customers and the entire financial system.

And for financial services providers at the top of the chain, open banking will offer them an opportunity to significantly innovate on their product offering to business.

But on the side of the businesses- both small and large- the innovations provided by the financial services providers will give them an efficient financial tools while doing their business, especially in the area of payments, which involves automation and doing away with the headache of engaging manual task.

On the side of the customers, open banking will bring better ways to spend, borrow and invest money.

Further to this, this banking service  is seen as a driving force of innovation in the banking industry as it relies  mostly on network instead of centralisation. It should however be noted that this innovation can help financial services customers to secure and share their financial data with other financial institutions.

With  the FirstBank Fintech Summit  2021 focusing on open banking, the bank’s stakeholders stand to gain   wider knowledge on the best way to access financial services offered by  the industry.

Operating an open banking will stand as good news for First Bank customers, on the grounds that an open banking model will afford them  easier access to a wider array of financial services offered by a larger selection of providers.

With open APIs, customers can choose to share their financial information with other financial institutions and third-party providers, in order to access personalised product and service offerings.

Open APIs will make it much easier for banking customers to transfer their accounts, manage payments, and conduct transactions through other banks and FinTechs — thereby creating new opportunities for banks, FinTechs and aggregators to offer products and services from multiple providers on a single platform.

What challenges

Like every innovation, open banking comes with its own myriad of challenges one of which is security and lack of what is called “homogenous technical standards, such as certain security requirements, combined with complex internal technology systems.” This may make the process susceptible to corruption and fraudulent activity. 

By creating complex chains of data access, it also makes it harder to prove who was at fault following a theft.

Inserting third-party providers into the banking process is another concern. This, it is believed, increases the risk of scammers gaining access to customer information and their finances. 

Similarly, lack of education and awareness around open banking capabilities has made consumers less likely to consent to their data being shared, limiting banks and FinTechs ability to innovate.

What research shows

Recent research by Accenture reveals that two-thirds of consumers would not be willing to share their personal financial data with third-party providers.

Way out

The good thing however is that there is always a way out of these concerns. First, banks and FinTechs must educate consumers on the ways in which open banking can improve, how they organise and take control of their finances, including through monitoring spending and making better saving and investing decisions.

So, with the First Bank  Fintech Summit focussing on Open banking, experts with many years of experience in Fintech Industry will address some of these pressing issues during the panel sessions.

Also, the platform will also be a learning moment for all FirstBank customers and investors as well as the operators on how best to go about this novel banking service.

First Bank digital transformation

The 5th edition of First Bank  Fintech Summit will go a long way in complementing FBN’s efforts at further making its services customer friendly.

At different times, the FBN has launched different products to make banking easy for customers and  compete favourably in the Nigeria banking system. Some of these include FirstBank Chat Banking , LIT app, Fast Track ATM, First Mobile App, First Online.

 FirstBank chat Banking which  also known as the WhatsApp banking channel introduced for customers who are on messaging platform. The product is addition to the existing channels which include Unstructured Supplementary Service Data (USSD), Internet Banking and Mobile banking.

But the launching of the First track ATM by First Bank in 2020 was in response to curtail the spread of Covid 19 Pandemic and enables users to perform their regular activities such as transfers and withdrawals without interfacing with the machines while the LIT applications created to revolutionise the culture and experience of mobile banking in Nigeria.

First Mobile on the other hands provides convinient Access to both financial and non financial transactions by First Bank account holders through their mobile devices.

FirstMobile remains yet another obvious step towards leveraging evolving technologies to bring fast and convenient financial services closer to Nigerians, in line with the bank’s digital banking strategy.

As of June 2021, First Bank of Nigeria Limited, boasts 4,596,203 users on the FirstMobile App which is a 9 per cent growth of the total users in the previous year and an average of 27,730,830 transactions every month. With such large patronage from its over 30 million customer base, the need to always create an easy way for customers to conduct financial transactions comes into play and impressively, a dedicated platform that allows FirstBank customers to conveniently make transactions with their mobile phones, Tablets and Pc is always within customers’ fingertips.

FirstOnline is the Bank’s Internet Banking platform that provides unrestricted and secure access to your account anytime and anywhere through any internet-enabled device. This platform comes with classy features, impeccable user experience, convenience and is easy to use. As of June 2021, FirstOnline boasts of an impressive 597,466 customers, a 17  per cent growth on the previous year and 578,292 transactions per month, averaging a value of 388 billion  per month.

The First online designed to allows customers to perform transactions during any hour of the day as there is no closing time

It also enable customers enjoy the user-friendly and secure interface without external help or assistance and customers can make  transactions seamlessly from the comfort of their room or workplace without having to encounter the risks and time wastages involved in going to the bank.

First Bank also stands out in terms of developing  different banking applications to make banking transactions easy for its customers. 

The bank also focuses on customer needs and builds some digital capabilities in order to compete, maintain its leadership position in the industry and remain relevant in the digital age. Some  industry watchers believe it is  for this reason the FBN continues to attract new customers and grow on daily basis.