Access Bank Gets CBN’s approval to Launch Hydrogen
Access bank has ventured directly into the blooming Fintech industry as it gets approval by CBN to launch a payment subsidiary, Hydrogen
Access bank has announced approval by the Central Bank of Nigeria (CBN) to run a new payment unit. The new payment unit would be known as Hydrogen Payment Services Company Limited.
Guaranty Trust Holding Company (GTCO) also announced approval by the CBN to launch its payment unit about three months ago. GTCO payment, Squad, is a product of HabariPay Limited – a subsidiary of GT Company.
Hydrogen is a big move in Access Bank’s plan to venture into fintech services away from core commercial business services. It aims to offer its clients top switching and payment services on the continent.
The CEO of Access Bank, Hebert Wigwe, described the fintech unit as a step into creating a globally connected community and ecosystem. He added:
“Hydrogen is inspired by Africa, and aligns with its mission to build and sustain a global platform open for everyone to connect to great opportunities.”
According to Wigwe, hydrogen will further support CBN’s effort to strengthen financial inclusion in Nigeria.
Hydrogen promises reliable, easy, and affordable payment services to individuals and businesses. It plans to achieve that through robust risk management, sophisticated technology infrastructure, and top-notch governance.
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Why Big Banks are Diversifying into Fintech
It is no news that the fierce competition in the commercial banking space is stiff. That cluster makes it difficult for many commercial banks to grow revenue. For breakthrough, Nigerian lenders are now diversifying into the booming fintech to render more than core banking operations and to maximize income sources.
Although GTCO launched its payment unit, Squad, this year, it became a holding company last year. A holding company structure allows lenders to restructure their operations outside their core.
Similarly, Access bank completed its transformation into a holding company this March.
Other lenders that have also restructured into a Holdco are Stanbic IBTC, First Bank of Nigeria (FBN), and First City Monument Bank (FCMB).
Sterling Bank, a Tier-2 lender, is also on the track to restructure into a Holdco with approval for a non-interest option at sight.
An Expert Opinion
A digital banking expert who pleaded anonymity shared his opinion with BusinessDay. The expert opined that one of the fundamental reasons big banks are restructuring to take a space in the fintech industry is VALUE. Major fintech companies in Nigeria are more valuable than traditional banks.
The expectation of banks diversifying into fintech subsidiaries is that building from scratch and funding them to compete competitively in the fintech space would improve their value.
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