The Securities and Exchange Commission Nigeria (SEC) has warned fintech operators that while technology can enhance access to investment opportunities, it also has the capacity to increase risks if not managed appropriately.
During the inaugural biannual SEC Regulator–FinTech Clinic, Rabi Maidawa, a fund authorisation officer at the commission, stated that technology-driven platforms do not eliminate investment risks but can exacerbate them when systems are inadequately designed.
”Technology does not remove risk in investment; it heightens it. A single design flaw on a platform, such as an issue with data integrity, can rapidly propagate throughout the investor ecosystem,” Maidawa remarked.
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Regulators and industry stakeholders at the event emphasized the necessity for more robust compliance frameworks as digital finance continues to progress within Nigeria’s financial ecosystem.
Muhammad Jiya, the chief operating officer for emerging technologies and innovation at the Nigerian Financial Intelligence Unit (NFIU), pointed out that digital assets and technology-driven financial services are generating new avenues for financial crime.
He indicated that operators must ensure that compliance programs are integrated into their platforms from the initial stages of development.
”Digital assets and technology-driven financial services also introduce new participants in financial crime. As operators, compliance programs should be incorporated into your systems,” Jiya stated.
Fintech founders were further advised by industry experts to involve regulators early in the development of new products. Nelson Ikeagu, a regulatory expert, mentioned that pre-launch engagement with regulators is crucial for innovators whose products may not clearly fit within existing regulatory frameworks.
