Introduction
In recent years, Nigeria has witnessed a dramatic shift in its financial-services landscape. The rise of fintech-based banks and digital finance platforms is changing how people save, borrow, transact, and engage with money. Unlike the old model of commercial banks with branches, paperwork and limited access, fintech banks bring agility, accessibility and new business models. In this blog we'll explore how this transformation is unfolding in Nigeria, why it matters, and what it could mean for individuals, SMEs and the economy.
1. What is a fintech bank?
A "fintech bank" (or a digital-only bank/financial technology firm offering bank-like services) uses technology—mobile apps, APIs, digital wallets, automated credit scoring—to provide banking, payments, credit, savings and other financial services. These firms often do not rely on the traditional branch-network model of commercial banks.
In the Nigerian context, fintech firms are stepping in to fill gaps left by commercial banks: limited branch coverage in rural areas, high cost of servicing, slow processes, heavy documentation.
2. The rise of fintech in Nigeria: the facts
Financial inclusion in Nigeria rose significantly: from about 30 % of adults having formal bank accounts in around 2012 to around 64 % in 2023.
The digital payments and fintech ecosystem has grown rapidly: mobile money operators processed over ₦71.5 trillion in transactions in 2024, up 53.4 % from 2023.
The regulator, Central Bank of Nigeria (CBN), has implemented frameworks (sandbox, payment service banks licensing) to support fintech growth.
SMEs (small & medium enterprises) are increasingly using fintech banking solutions: nearly 50 % of Nigerian SMEs rely on fintech for business banking functions.
These numbers show that fintech isn't just a fringe trend—it's becoming central to Nigeria's financial ecosystem.
3. Why fintech banks may be more important than commercial banks for Nigerians
Here are key advantages fintech banks offer over traditional commercial banks, particularly in the Nigerian context:
a) Accessibility & convenience
Fintech banks offer mobile-first or app-first services: no long branch-queues, fewer physical visits, around-the-clock access. For many Nigerians—especially the youth, informal sector traders, rural populations—this matters a lot. Traditional banks still depend heavily on branches and legacy systems.
b) Faster processes & lower entry barriers
Opening accounts, transferring money, getting credit are often slower and more document-intensive in commercial banks. Fintechs streamline these processes: digital onboarding, minimal paperwork, faster decisioning.
c) Cost efficiency & innovation
Fintech banks can operate with lower overheads (no/less branch network) and pass on efficiencies or offer features commercial banks may not readily provide. They also tend to adopt newer tech (APIs, open banking, mobile wallets) faster.
d) Serving underserved segments
Large parts of Nigeria's population—youth, informal sector, rural communities—have been underserved by commercial banks. Fintechs can reach them via mobile phones, agent networks, digital channels.
e) Empowering SMEs and informal sector
Since SMEs make up a large part of Nigeria's economy, their banking needs (payments, digital cash-flow management, credit) are increasingly met by fintechs rather than older banking models designed for large corporates.
4. Challenges & what commercial banks still bring
It's not all one-side. While fintech banks bring many advantages, commercial banks still have roles and strengths:
Trust and brand: Many people still trust commercial banks more, especially for large transactions, long-standing relationships.
Regulation, deposit protection, physical presence: For some customers, branches and physical access matter.
Infrastructure for large corporates: Commercial banks have the infrastructure, licences, balance-sheets to serve big clients.
Thus, the future likely involves collaboration or coexistence: fintechs + commercial banks working together.
5. Implications for Nigeria's economy & you (Baba D's audience)
For individuals: easier access to savings, payments, credit; less dependence on cash or physical bank branches; more control of finance via smartphone.
For SMEs: digital tools for payments, reconciliation, mobility; reduced friction and cost; faster growth potential.
For the national economy: increased financial inclusion, deeper digital economy, more jobs in fintech, improved productivity.
For commercial banks: a wake-up call — need to modernise, partner with fintechs, adopt digital models or risk losing relevance.
6. Key take-aways
The rise of fintech banks in Nigeria is real, rapid and impactful.
They matter more than commercial banks in many use-cases (access, speed, cost) especially for underserved populations.
Commercial banks are not obsolete—they still have roles. But the financial services landscape is changing and commercial banks must adapt.
For Nigerians, the shift means better access to financial services, more choices, greater inclusion.
The combination of fintech innovation + regulatory support + mobile penetration = opportunity for the future.