Financial technologies are not a threat to banks but any regulation that allows telecommunication companies to venture into banking services will constitute a significant threat to banks.

That is the summary of a new report by Nigeria’s top lender Guaranty Trust Bank.

In the report titled: Nigeria Macro-Economic and Banking Sector Themes for 2019, the bank said the payment service banks (PSBs) will compete with commercial banks for earnings.

“A more compelling threat, however, relates to the recent decision by the CBN to license Payment Service Banks (PSBs) to facilitate transactions in remittance services, micro-savings and withdrawal services in rural areas,” it said in the report released on Monday.

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Describing the move as a positive for customers, the report said it would improve customer service and digitalisation of banking services while enhancing financial inclusion.

In 2018, MTN Nigeria and Airtel had announced plans to delve into mobile money services with the former expressing hopes that it would get the CBN’s approval and launch in the second quarter of 2019.

The PSB license will, however, not allow the telcos offer lending services and participate in the foreign exchange market.

In the report, the tier one lender also said the capacity of financial technology (FinTech) companies to gain a significant market share would be limited in the absence of collaborations.

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