NDIC: We’re working on insurance for non-bank financial institutions

The Nigeria Deposit Insurance Corporation (NDIC) says it is working on providing insurance for customers of non-bank financial institutions (NBFIs) licensed by the Central Bank of Nigeria and other agencies.

Umaru Ibrahim, managing director/chief executive of NDIC, was speaking at the 2020 NDIC workshop for business editors and Financial Correspondents Association of Nigeria (FICAN) in Kaduna on Wednesday.

Ibrahim said although financial technology (Fintech) enhances market competition and financial inclusion, the increasing sophistication and proliferation of technology in banking operations ushers in unintended consequences such as operational and legal risks, and security of consumer personal data.

He said managing the risks associated with emerging technology without stifling innovation has become a major theme amongst regulators and policymakers.

Ibrahim made reference to CBN’s regulatory sandbox operations to encourage innovation, especially for startups and NDIC’s innovation and fintech unit which is to drive emerging technology and provide solutions to improve the safety of depositors and the banking system.

“There are two main concerns for the corporation on fintech: these are how to identify and insure non-bank deposit-taking institutions licensed by CBN and other agencies e.g. SEC,” he said.

“Currently, there is an ongoing engagement with the relevant regulatory agencies on how to actualise that within the limits of legal provision.

“The second is how to tap into the potentials of fintech to effectively execute its business processes easily, speedily, and reliably.

“Consequently, we look forward to modernising our data collection and analysis through the use of fintech solutions/tools to handle business processes better than currently being done”.

Ibrahim further said emerging developments in the fintech space and long-term effects of the COVID-19 pandemic on financial systems will largely be determined by NDIC actions in promoting innovation while strengthening bank stability.