Why I am Betting on Banking And Not Fintech – Uzoma Dozie
The Chief Executive Officer of Sparkle, Mr. Uzoma Dozie via a lengthy post on Medium highlighted several reasons why he is placing his bet on banking and not fintech.
In a comprehensive article titled “I am betting on banking not fintech,” Mr. Dozie noted that when it comes to offering value traditional banks have so far surpassed fintechs in achieving that.
He adds that while many African fintech companies emphasize making banking more accessible, particularly to the unbanked or underbanked populations, solely focusing on fintech solutions has its limitations. He further noted that those lacking banking experience may find it challenging to scale their operations and deliver significant value to customers.
To make a meaningful impact, Mr. Dozie highlighted that it is essential for fintech firms to integrate banking expertise into their strategies, ensuring they can effectively address the needs of their target markets and provide sustainable solutions.
In the area of catering to the underbanked and underserved, he acknowledged fintechs for the crucial role they have played in plugging that gap. However, amid their pursuit of new customers and constant updates to their pitch decks showcasing customer acquisition costs (CACs), they appear to have overlooked the core principles of banking, which is creating value for customers while ensuring the bank remains a revenue-generating entity.
In his words,
“Banks haven’t been able to serve the underserved or underbanked; and fintechs have, on the surface, plugged that gap. However, in their rush to sign up new customers and continuously update their pitch decks with their CACs, the fintechs seem to have forgotten the fundamentals of banking; how to create value for customers whilst extracting value to make the bank a revenue-generating entity. Signing up customers is great; monetizing customers is greater still, but generating mutually beneficial value for all is truly the greatest.”
While lauding fintechs for their user-friendly interfaces, Mr. Dozie raised concerns about their security features, which have led to breaches and loss of customer funds. He emphasized the fundamental importance of keeping customers’ money safe and asserts that achieving this demonstrates true value creation. He says, keeping customers’ money safe is the absolute bare minimum when it comes to banking.
Amidst his bet on banking Mr. Dozie however, acknowledged that he is a big advocate of banking that is revolutionised by technology just like what fintechs are doing. Speaking on his company Sparkle, he says the company is a bank-led service provider powered by a fintech structure.
