Convenience vs. Security: The impact of FINTECH on privacy rights in Nigeria

A consumers’ ability to order items or services online is one of the foremost benefits of this digital age. If you arrive at the Murtala Mohammed International Airport for the first time, without any contacts in Lagos, you can get a hotel, book a ride and grab a bite all from the comfort of your mobile phone. This may not seem like such a big deal if you are a digital native, but if you are a bit older, you remember a time when to travel and settle in anywhere you needed to have friends or family in that city. With technology has come the possibility and indeed priority of “convenience”. Without convenience, today’s customer will most likely not patronize your organization unless they cannot do without your product.

Bringing this home to the financial services space, in the early 1990s in Nigeria, customers could only make deposits or withdrawals physically. If you needed cash or wanted to make a payment, you had to go to the bank’s branch early enough to avoid the lengthy queues. I distinctly remember waiting at a Union Bank branch to cash a cheque for over 4 hours and waiting for 2-3 days to open a bank account. Fast forward to today, with the increased adoption of financial technology you can: make withdrawals from Paga agents on your street, make payments for vendors or open a Kuda bank account online.

In our desire for convenience and less bureaucracy in financial transactions, we must ensure that this is not done at the expense of trust and security: the hallmark of the financial services industry. With the celebration of international data privacy day last week, there is no better time for the FINTECH industry to begin to seriously prioritise privacy and data protection. As the saying goes, "Adventure is the life of commerce, but caution is the life of banking." (Walter Bagehot, Lombard Street: A Description of the Money Market).

As Financial Technology (FINTECH) becomes part and parcel of the Nigerian society, there is a need for financial technology companies to have laser focus on data protection and data security. Certain factors make this even more crucial at this time.

The first is the change occurring in social consciousness particularly in Nigeria. Some of us have parents that were victims of the Wonderbanks that existed in the 1980s and 1990s. Only few of them took cases of fraud to court. Many others decided to leave the matter buried. If this was to occur today, you can be sure that the reverse will be the case. In this era of social media and the emergence of Generation Z, if customer details from a financial technology provider are leaked and any form of harm occurs, you can be sure that such details would be posted online, thus, causing reputational damage to your organization.

Also consider another change, the increased understanding of data privacy rights by the Nigerian society. Sometime last week, a friend showed me an SMS sent by an online lending application. The message stated that the person in question was a criminal on the run with a specified amount of money. Consider if such a person decided to expose this breach. The backlash the company could be exposed to could be huge. As much as it is important to ensure that customers pay back their loans in time, sending messages calling the client a fraudster may be considered defamatory and is definitely not respecting the customer’s privacy right.

So, what can you do as a FINTECH company operating in Nigeria:

· engage a consultant to help you assess your data protection practices

· recruit a Data Protection Officer and appoint data privacy champions within your organisation

· build up systems that will ensure that you are protecting the rights of your customers