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  FinTech—short for financial technology –is an industry on the rise. The companies in its domain are leveraging contemporary tech solutions to improve various aspects of finance, from payments to loaning, insurance and wealth management. And these are just the tip of the iceberg.
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It’s no surprise that there’s been a proliferation of FinTech startups over the past few years. Current estimates suggest that there are at least 250 of these ventures in Nigeria. More of them appear on the scene every other year. If you’re knowledgeable about the intersection of finance and technology and you’re thinking about starting a business, here are six reasons why building a FinTech is an option you should seriously consider.

A Large Market

Nigeria is home to more than 200 million people—including tens of millions of adults. That’s a huge market for financial technology products. Thanks to FinTech, transactions which could only be carried out in bank halls can now be completed wherever there’s access to the internet. Electronic payment channels, mobile wallets, digital loan platforms, and tech-driven investment solutions are just some of the benefits that FinTechs offer. And there’s a large and growing potential customer base for these things.

The Future of Finance

FinTech is the future of finance. The signs are obvious; it’s out with the old and in with the new. From blockchain to InsurTech, digital accounts and online bill settlement, novel tech-powered services are disrupting traditional ways of doing things and introducing more efficient approaches to handling finance. We’re witnessing a slowdown in the establishment of physical bank branches, just as e-banking has become accessible to much of the country’s population. If you’d like to play in the finance industry in a truly forward-looking way, FinTech is the path you should take.

Potentially Huge Returns

The available evidence—whether it’s anecdotal or hard data –indicates that FinTechs are among the most lucrative businesses in these parts. Between 2017 and 2022, revenues coming into these companies more than tripled, rising from $153 million to $543 million within the six years in question. Because finance is such a crucial part of an economy’s functioning, innovations that make it easier or more efficient are almost certain to increase the returns that come from it.
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Investors’ Favourite

Investors seem particularly interested in FinTech. They have staked more funds on startups in this industry than they have in other tech domains. Of the $1.37 billion raised by startups in Nigeria in 2021, 63% was secured by FinTechs. It’s easy to see why angels and VCs would channel more funds to establishments in the financial technology space. They see that startups there have only scratched the surface of what’s possible; large swathes of Nigeria’s population remain unreached or underserved by existing players. There’s a potential harvest of huge profits if the market is as big as is widely believed.

Room for Excellent Service Providers

Some observers say that Nigeria’s FinTech ecosystem—especially payments –is getting crowded. They opine that there are already too many players in the space and that most of them won’t survive the hyper-competitive market for the sort of products they provide. But a close look at reality dispels this notion. There always seems to be room for startups that deliver excellent service, have a solid growth roadmap, and are run by competent teams. If your venture has these characteristics, it has a decent chance of pulling through and thriving.

Drive Meaningful Innovation

Founders who want to make a positive impact on Nigeria’s commercial arena can do so with a world-class FinTech company. As we’ve already noted, this industry is playing an increasingly pivotal role in the transformation of our economy. Anyone (or team) who builds the payment gateways, business financing applications and wealth creation platforms of the future will be doing their part in modernizing the country’s economy, and, ultimately, making life much easier for Nigerians.
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Final Words

We have laid out six reasons why you should give serious thought to starting a FinTech business in 2023. Whatever you decide to do, ensure that you carefully weigh your options and go for one that’s in line with your skills, passions, aims, and intended rewards. If you’re strategic enough about launching a FinTech that does well in its market, you could build the next financial technology giant. Featured Image Source: Ventures Africa
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This article was first published on 4th February 2023


Ikenna Nwachukwu holds a bachelor's degree in Economics from the University of Nigeria, Nsukka. He loves to look at the world through multiple lenses- economic, political, religious and philosophical- and to write about what he observes in a witty, yet reflective style.

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