Nigerian fintech firms have raised $ 600 million in five years – McKinsey Report
In recent times, we’ve seen APIs go from being a curious term among tech enthusiasts to becoming the heart of many businesses. APIs have been very valuable for developers and businesses as they serve as a communication channel between two services.
In Nigeria, API fintech startups have had a huge impact in the fintech space with the rise of API startups like Mono, Okra and Onepipe which are building the African API infrastructure for institutions and third-party companies for different purposes. These startups have attracted investors in a very short time.
Why API startups?
An API facilitates the integration of applications and services because it facilitates communication between them. APIs allow businesses to build ecosystems around their operations. Today, they are responsible for connecting people and systems allowing the creation of a better user experience by simplifying access to information.
For example, instead of building their own mapping and payment services, Uber was able to leverage public APIs like Google Maps and a payment gateway, and then deliver them in a mobile app that ended up changing the entire industry. of transport around the world.
Why open banking is important
Open banking is a banking practice that provides third-party financial service providers with open access to banking services, transactions and other consumer financial data from banks and non-bank financial institutions through the use of ‘application programming interfaces (APIs).
Since fintech startups fundamentally focus on delivering financial solutions, they need access to financial data to continually create new solutions and prove their value to potential users. Open Banking offers them the possibility, in the form of convenient access to financial data and services, to expand their customer base and their products.
However, open banking also poses security threats such as data breaches due to poor security, the possibility for a malicious third-party application to clean up a customer’s account, or insider threats from financial institutions which have become relatively widespread as more and more data is interconnected.
In an interview with Abdulhamid Hassan, CEO of Mono HQ, a booming API fintech startup, we were able to understand what they do and how their services are beneficial.
What was the inspiration for creating your startup?
The inspiration behind the founding of Mono came from a conversation between me and Prakhar. We had just realized how difficult it was to find a service that could put all of our financial accounts in one place so that we could see them at the same time. There is no such thing as being directly related to an issue as it means you have first hand knowledge of the difficulty it presents. We decided to create an app that could power account linking, and that’s how we started to found Mono.
What does Mono do and what sets you apart from other fintech startups?
Mono creates APIs and infrastructure that make it easy for developers and businesses to create better experiences for their users. Our APIs act as a channel for these companies to access financial data and accounts. We don’t see ourselves as a fintech startup, we are more of a data company that makes innovation possible. Today, it’s primarily the fintech companies that we support with our identity / account verification, statement collection, and direct debit services. Tomorrow it could be Edtech or Health Technology.
What problems are you trying to solve in Nigeria and Africa?
Today in Nigeria there are many companies whose products need the financial data of their customers to function. Banks don’t have public APIs that businesses and developers can use. Without this information, services that deliver value to customers cannot be delivered optimally. But now, thanks to our APIs, people can securely link their financial accounts, share their banking data like statements, transactions and balances in seconds with other businesses.
Businesses can also verify the identity and account information of their users and more. With this infrastructure and information, businesses can provide better services and experiences to their customers, mitigate identity fraud, and even create new products based on these possibilities.
So we solve the problem of inaccessibility to data and financial accounts, and enable companies to innovate and build for their customers.
Do you think Nigeria is really ready to embrace an open banking system?
We believe that while Open Banking is a relatively new financial practice in Nigeria, its adoption is spreading rapidly. This innovation can grow to make adoption necessary, rather than something the country’s financial system needs to be ready for.
What would be the role of API companies like you in promoting open banking in Nigeria?
In addition to enabling more businesses in the African ecosystem to create endless possibilities and personalized experiences for the everyday user, our role is also to be an example of respected data and privacy ethics.
What are your expansion plans in other African markets?
Mono started out in Nigeria, but our mission is to boost the internet economy in Africa. Our expansion plans allow us to locate in Ghana and Kenya, first to understand each market and the ways in which Mono services can solve their problems, and then establish ourselves there.
At the end of the line
As APIs are an effective way to enable digital transformation of businesses, the ability of businesses to innovate and become the first to adopt API services is the key to success, which will allow businesses to enter new markets they might never have considered.