The Securities and Exchange Commission (SEC) has reaffirmed its commitment to protect Investors amid Nigeria’s rapid expansion of financial Technology (fintech). This announcement reflects the Commission’s proactive approach to regulating the growing Fintech sector and protecting investors from potential risks associated with mismanagement or fraudulent practices. During a capacity-building session for financial journalists in Abuja, SEC Director-General Dr. Emomotimi Agama emphasised the need for stricter enforcement of existing regulations within the fintech ecosystem. He highlighted that operators must comply with Capital Market rules, particularly those governing fundraising, to ensure transparency, accountability, and investor confidence.
Dr. Agama stressed that a conducive regulatory framework promotes Innovation in Nigeria’s financial industry. While fintech is driving transformation in the financial ecosystem, it presents new challenges, especially concerning investor protection and regulatory oversight. To address these challenges, the SEC is focused on creating a balanced environment that promotes innovation while ensuring adherence to established financial principles. Furthermore, their key strategy is enhancing the oversight capabilities through a Risk-Based Supervision (RBS) system. Supported by expertise from the Toronto Centre, this initiative equips the SEC to supervise market operators and Infrastructure effectively, ensuring the regulatory system remains responsive to emerging trends in fintech.
Addressing financial technology challenges in the digital age.
Hasfat Rufai, Director of Registration, Exchanges, and Market Infrastructure at SEC, noted that while digital platforms, cryptocurrencies, and global market access have revolutionised Investment practices in the country, they also introduce significant regulatory challenges. She assured stakeholders that the Commission protects investors’ funds and maintains market integrity despite these disruptions. Rufai acknowledged that the rise of young investors and innovative financial products reshapes the capital market system. To adapt, they encourage investors to embrace technology, gain financial literacy, and make informed decisions.
Furthermore, the impact of fintech reaches far past traditional financial services, notably enhancing the commodities market in the region. In his remarks, Abdulrahman Abubakar outlined how technological innovations have connected storage facilities electronically with trading platforms. This progress enhances market transparency and operational effectiveness, rendering the commodities market more accessible and uniform. Abubakar emphasised the Commission’s commitment to refining its regulatory system in response to the growing financial ecosystem. By leveraging advancements in fintech, they actively promote a competitive and efficient commodities market, contributing to the nation’s economic development.
Evolving regulation and the impact of fintech on the financial industry.
Nigeria’s regulatory framework has undergone considerable transformation to support the growing use of digital and virtual assets. In 2024, the Commission introduced a regulatory incubation scheme to facilitate virtual asset provider integration. This effort corresponds with the Finance Act 2023, which broadened the definition of taxable assets to encompass digital assets, marking their official acknowledgement within the nation’s financial framework. Furthermore, The Central Bank of Nigeria (CBN) removed barriers for commercial banks to engage with digital asset service providers. This initiative reflects a united effort among regulators to balance technological advancements with protecting investors and promoting a safe and clear digital marketplace.
Meanwhile, the country’s financial industry encompasses various fields, such as digital banking, online lending, payment solutions, asset management, and Blockchain applications. These advancements have transformed how financial services are accessed, enhancing inclusivity and efficiency across the country. Millions of Nigerians now benefit from optimised payment platforms, better lending alternatives, and investment opportunities that were once out of reach. The influence of financial tech goes beyond Nigeria. It is broadening Nigeria’s financial access internationally and creating new avenues for Trade and investment. By digitising traditional banking methods, fintech is actively altering the financial environment, providing enhanced ease and availability for individuals and companies.
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As fintech drives the country’s financial transformation, the Commission remains steadfast in its commitment to investor protection. The Commission seeks to ensure that the financial tech ecosystem operates transparently and responsibly through stricter Regulation enforcement and collaboration with international experts. By balancing innovation with robust regulatory oversight, the SEC aims to create a thriving financial ecosystem where investors and operators can engage confidently. This balanced approach ensures that technological advancements continue to drive Nigeria’s Economic Growth while preventing the interests of all stakeholders in the financial market.