How innovation, regulation can spur fintech growth – Digital banker, Ibrahim

Not restricted by the many regulatory requirements expected of traditional banks, financial technology (fintechs) firms have leveraged their position as disruptors in the market and promoting their ability to offer more agile services at lower prices. Speaking with Daily Trust YOUTHVILLE, Ibrahim Toyeeb, the Chief Executive Officer of technology company, Leatherback, said when technological innovations […]

Not restricted by the many regulatory requirements expected of traditional banks, financial technology (fintechs) firms have leveraged their position as disruptors in the market and promoting their ability to offer more agile services at lower prices. Speaking with Daily Trust YOUTHVILLE, Ibrahim Toyeeb, the Chief Executive Officer of technology company, Leatherback, said when technological innovations and financial regulation work in harmony, more fintech enterprises would rise in Nigeria.

  

While calling on more regulation as young Nigerians develop more fintech muscle, Toyeeb said: “Technology, innovation, regulation and experience should go side-by-side. It should not be a matter of one or the other. The ability of fintechs to sidestep regulation has created distrust amongst consumers, who are increasingly voicing their need to be assured that their money is safe.”

Mr Toyeeb spoke about the winning point of Leatherback, when he started.

“That is why – when we started Leatherback – we decided to view regulation as our friend, rather than our enemy. From the beginning, our model was always to get licenses in the countries we operate in,” he said.

Toyeeb said Leatherback’s licensing approach is rooted in the understanding that getting directly licensed helps build trust with clients, and provides them with the peace of mind that comes with knowing they are dealing with a fully regulated entity.

Leatherback commenced the licensing process in the United Kingdom (UK) and Canada. “Notably, we are licensed with the Financial Conduct Authority (FCA) in the UK, which is the highest regulatory body in the world. This means we are held to extremely high standards. We benchmark all our processes against the FCA and our systems are structured to adhere to all FCA requirements.”

Despite the onerous processes involved in obtaining licenses, Toyeeb said Leatherback is also Electronic Money Institution (EMI)-licensed in the UK, which allows it to offer electronic money services in the country.

“At the same time, we obtained a license in Canada as a money service business, a move that was aimed at making our Canadian clients feel comfortable with our platform and providing them with the same level of comfort they get from their banks and other financial services providers,” he added.

Speaking further in the interview, Toyeeb said Leatherback is currently licensed – or in the process of being licensed – in about 13 other countries which it operates in. “Every regulator expects us to meet specific technological requirements and partnership standards. We are going through all of these regulatory processes and applications to make sure when consumers hear the name Leatherback, they feel comfortable hearing it. They know they are working with a properly structured and fully regulated organisation that will keep their money safe and give them the best possible service,” stated Toyeeb.

The technology company is being licensed in developed and frontier markets. While regulators in some of these markets may not be up to date, Leatherback has liaised with regulators to ensure that it offers the best services to its clients.

Explaining why the government would need to sustain it’s licencing role of businesses, the Leatherback helmsman said by becoming licensed, Leatherback does not have to leverage third party providers and that it enables the firm to tap directly into the local infrastructure in every country without engaging a local party that would charge extra cost to the consumers.

On more international collaborations, he said 

Leatherback has joined hands with recognised and reliable solutions providers such as Currency Cloud, which provides account solutions in the United States and parts of Europe, ClearBank, one of the largest banks in the UK. It has also partnered with 4Stop, a Know Your Customer (KYC), compliance and anti-fraud solution provider, and Yes Bank in India.

Toyeeb said: “Today, Leatherback has more than 40 partners globally, and partnerships with about three banks in each country it operates in.”

Even while promoting a strong regulatory base, Toyeeb said his company can further leverage on innovation. “We are committed to providing our clients with a unique financial technology experience that helps them explore different opportunities, while at the same time not erring on the wrong side of regulation.

“We understand that regulation, in one way or another, has to catch up with innovation, but we are happy to help play a meaningful role in bridging the gap with various regulators in the sector,” Toyeeb concluded.