Fintech in Nigeria - It's "Partner" Over "Disrupt"
That is the fact - fintech cannot easily disrupt the traditional banks in most African economies simply because the regulators would not want the dislocation in the banking order. So, as you work on those business plans, find ways to use lesser "disrupt" and add more "partner". That is how most investors are looking at the investment opportunities in the continent.
From Wema's ALAT to UBA's LEO, some of the traditional banks have top-grade fintech products which are far superior to most of the independent fintech solutions. We do believe there are opportunities for partnerships but the issue of immediate disruption is wishful thinking.
It was a battle earlier in the year for my practice to convince a startup client to drop “disrupt’ for “partner” in order to close deals. If you want to disrupt, you may have to move to Kenya where anything goes but in Nigeria, the word is PARTNERSHIP.
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While 'disruption' was arguably the word of 2014 following Uber's rapid global expansion and massive market impact, investors today look more for partnership opportunities between would-be disruptors and market incumbents. KPMG's Forging the Future report in 2017 found that more than 80% of companies surveyed considered partnership to be the preferred avenue through which to engage the market. This may partly be because corporate venture capital investment in fintech now accounts for 19% of all global fintech deals.
In as much as people can easily get fixated with fancy or buzzwords, it's still better to be real and go for the real thing.
You do not need to argue with who prefers 'disrupt' over 'partner', simply, by asking him/her what exactly does he/she want to disrupt? The credibility and strength of the response would put the argument to bed once and for all.
The market here has a lot of eminent domainers and incumbents that are well protected, so it's either you carry your disruption campaign to the untapped markets and go ahead to enjoy first mover advantage, or you play the partnership game and remain relevant, until the status quo on the regulatory aspect changes.