Dozie: Future of payments will be a mix of traditional, tech-powered solutions

The global payments landscape is evolving rapidly, with a significant shift towards a mix of traditional banking practices and innovative tech-powered solutions. Uzoma Dozie, the Chief Executive Officer and Founder of Sparkle Nigeria, shared his insights on this transformation during a recent interview on CNBC Africa. Dozie emphasized the importance of building trust with users and regulators to drive the growth of the payment industry. He highlighted the key role that technology plays in addressing market risks, policy inconsistencies, and regulatory uncertainties in Nigeria and beyond. Reflecting on the current state of the banking sector and fintech collaborations, Dozie acknowledged the positive trend of increased payments processed through both traditional banks and fintechs. He noted that the pandemic-induced lockdown and cash shortages in the past year prompted banks to enhance their electronic payment systems, thereby intensifying competition with fintech companies. Despite these advancements, Dozie raised concerns about the need for robust regulations to prevent money laundering and terrorist financing, especially as Nigeria faces regulatory scrutiny over its financial practices. Transitioning from the traditional banking sector to the digital realm, Dozie highlighted the benefits and challenges faced by both types of financial institutions. Traditional banks possess capital, established networks, and a legacy of trust, which are critical for retaining customer deposits and ensuring financial stability. However, fintechs have the advantage of agility and innovation, but they must not overlook the fundamental principles of banking, such as creating value for customers and generating revenue sustainably. Furthermore, Dozie underscored the concept of open banking as a game-changer in the industry, allowing customers to control their financial data and enabling seamless transactions across various banking platforms. By consolidating financial information in one bank, customers can expedite loan approvals and enhance competition among lenders, driving better service offerings and improved customer experiences. In light of the challenging economic conditions and regulatory reforms in Nigeria's banking sector, Dozie addressed Sparkle Nigeria's entry into the lending space. Despite the tightening monetary policies and the possibility of rising non-performing loan ratios, Sparkle aims to strike a balance between traditional lending rates and fintech speed. By focusing on low-risk lending opportunities and prioritizing customer financial well-being over profit maximization, Sparkle intends to support its customers through tough times and contribute to their financial growth. While the interview touched on a range of topics, including cross-border payments and regional integration, the discussion underscored the dynamic nature of the payment industry and the need for collaborative efforts between traditional financial institutions and innovative fintech players. As digital transformation continues to reshape the payments landscape, maintaining a balance between tradition and technology will be crucial for driving sustainable growth and fostering financial inclusivity in the years to come.