How mobile payment, crowd funding, Block-chain are killing traditional Banks — Expert

Finance expert Victor Arowolo has emphasised the ongoing disruption in Nigeria’s financial sector, identifying the rapid growth of mobile payments, crowdfunding platforms, and blockchain technology as significant forces challenging the dominance of traditional banks.

Arowolo notes that Nigeria’s banking landscape, once dominated by deposit money banks known for their bureaucratic processes, urban focus, and high operational costs, is being transformed by financial technology (fintech).

“For over a decade, traditional banks in Nigeria have been seen as elite institutions, inaccessible to millions of Nigerians due to their cumbersome loan processes, strict account-opening requirements, and high fees,” Arowolo explained.

Data from EFInA in 2010 showed that only 30% of Nigerian adults had access to a formal bank account, leaving a vast majority unbanked or underbanked. This gap, Arowolo said, created an opportunity for fintech innovation to thrive.

Arowolo noted that the fintech boom started gaining momentum around 2015, driven by Nigeria’s high mobile penetration, with over 87 million active users at the time. While early mobile money services were launched by telecom operators like MTN and Airtel, newer players such as Paga, KongaPay, and Paystack took innovation further.

These platforms allowed users to save, send, and receive money directly from their phones, without needing a bank account. The shift was profound.

According to a 2015 Central Bank of Nigeria (CBN) survey, mobile money transactions skyrocketed from ₦3.2 billion in 2012 to ₦98 billion by mid-2015. Paga alone processed over six million transactions worth ₦70 billion in just the first quarter of 2015.

“This enabled market women, artisans, and small business owners to perform financial transactions without visiting a bank or using a POS terminal,” Arowolo said. “It empowered everyday Nigerians.”

Crowdfunding has also emerged as a significant disruptor. Platforms like NaijaFund, StartCrunch, and GiwaFund enabled individuals and small businesses to raise funds from the public via the internet—especially in sectors where traditional bank loans are nearly impossible to secure, such as the creative industries, tech startups, and agriculture.

Between 2013 and 2015, over $15 million was raised through Nigerian crowdfunding platforms, according to Disrupt Africa. Much of this funding came from the Nigerian diaspora, reflecting a new model of community-based financial inclusion.

Arowolo further emphasized the growing influence of blockchain technology, which offers a decentralized, secure, and transparent alternative to the centralized databases used by banks.

Cryptocurrencies like Bitcoin also began to gain popularity among Nigerian youth and tech-savvy investors. While monthly transaction volumes were estimated at less than $10 million, they were growing by over 200% year-on-year, according to Blockchain.info.

“Bitcoin became not just a digital currency but a hedge against naira devaluation,” Arowolo noted.

In conclusion, Victor Arowolo said Nigeria’s financial system is undergoing a fundamental transformation. “Deposit money banks are no longer the sole gatekeepers of capital,” he said. “From mobile wallets to blockchain, Nigerians are embracing a new era of financial empowerment, speed, and accessibility.”

He added, “The fintech revolution isn’t just coming—it’s already here, and it’s here to stay.”

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