Disruptive Technology and the Fintech Industry in Nigeria: Imperatives for Legal and Policy Responses

Abstract

From faster payments to online lending and distributed ledgers, Financial Technology (popularly referred to as Fintech) is radically revolutionalising the way and manner in which we conduct our businesses and carry on with our daily activities concerning finances and financing initiatives. It is invariably impacting on every aspect of our lives, ranging from the payment for services rendered, merchant activities, lending platforms, banking services, crypto-currencies, wealth or finance management, mobilisation of funds, to mention a few. There is no doubt that the emergence of Fintech is a direct product of the evolution of the age of disruptive and digital technology or innovation, offering innovative products and services to consumers and stakeholders across the entire financial ecosystem. It is common that any innovation comes various issues or risks associated with the system and some of the problems relating to the Fintech industry are regulatory uncertainties affecting investors' participation, hostility from Financial Services (FS) incumbents, poor data protection, terrorism financing, money laundering, cyber crimes, identity theft or fraud, business and financial crimes. These issues coupled with the increasing and sustained interest for a collaborative and inclusive process of stakeholders' engagement in this emerging area, has led to the echoing demands for the government and the regulators as an important stakeholder in the Fintech ecosystem to enact relevant legislation and issue applicable guidelines and regulations for all stakeholders in the Fintech industry. It is in the light of this that this paper examines the concept of Fintech and the evolution of the industry in Nigeria within the global business and commercial landscape whilst highlighting the various associated issues affecting the industry and the manner the law is expected to respond to them. The paper also examines the legal and regulatory framework for the Fintech industry in the United Kingdom and the United States and draws out relevant and invaluable lessons for the development of the industry in Nigeria intending to fashioning out a viable legal and regulatory framework for the Nigerian Fintech industry.