It was a few years ago when Innocent Chizaram Ilo, an educated young man in bustling Lagos, realized he was excluded from Nigeria’s banking and finance system. He had won an international writing award in the form of a monetary prize. But when he tried to access his funds, the bank asked him to upgrade his account. What seemed like a simple request became a grueling ordeal. He made 15 visits, all under the sweltering Lagos heat and traffic. The process demanded everything from referees with both salaried and non-salaried bank accounts to utility bills and more. Stories like Innocent’s reveal the barriers blocking access to banking and show why fintech opportunities in Nigeria’s unbanked market are urgent and untapped.

Why Women Face Greater Barriers

If you dig deeper, very similar stories pour in, stories like that of Bimpe Akinremi, who spoke to the Premium Times, and many other women who make up the 25 million Nigerian women who are unbanked. This shows another major slice of fintech opportunities in Nigeria’s unbanked market, especially for women-led businesses. How, you might ask, are women more unreached for banking and finance products than men? For Bimpe, who lives in Apatere, a town in southern Nigeria, the answer is clear. Many men have jobs that take them out of town to places where financial touchpoints exist. But many women, who are uneducated and run localized businesses, lack access to any services in the rural areas where their businesses are set up. This is a huge untapped opportunity.

Further statistics show that young adults now have access to smartphones and the apps in them. Many are active on X, Facebook, and WhatsApp. This demographic shows great interest in technological services and eagerness to learn. All these are just a few reels of what robust opportunities exist for FinTechs in Nigeria’s over 200,000,000 population.

Nigeria has made some huge leaps in several industries in recent years, but arguably none more significant than in FinTech, yet about 40% of the adult population remains either unbanked or underbanked. 

The need for innovation in product, customer experience, brand, networks, channels, and profit models is paramount, and the opportunities are boundless. 

Opportunities in Untapped Demographics

In a recent study our team undertook, we uncovered interesting data and opportunity areas for fintech opportunities in Nigeria’s unbanked market.

Untapped regions and demographics: As with the stories above, untapped locales and demographics exist within the country. Teenagers and young adults now make up over 70% of Nigeria’s population. About 63% are under the age of 25. By 2030, this number could exceed 165 million. Young people will increasingly shape the country’s economic future. They will influence purchasing decisions, human capital, and entrepreneurship.

With nearly 60% of 14-18-year-old having access to smartphones and tending towards new technologies, there’s a huge potential to develop solutions tailored to the unique lifestyle needs of the Nigerian and African youth. Even more competitive? Looking into the trends that determine the behaviour patterns of this generation and designing solutions for them. One of these patterns is the shift of talent to Africa; the youth are not unaware of this shift and the opportunities that lie within. Exploring areas such as this will not only move this hungry and enterprising demographic to the solution, but will also make any FinTech seize the opportunity to be competitive.

The Case for Northern Nigeria’s Unbanked Population

Northern Nigeria has another huge potential, being one of the largest financially excluded regions in the country. Currently, 54% of people in the North-west and 42% in the North-east remain financially excluded. Cultural and religious nuances in Northern Nigeria have posed challenges for some FinTechs. Yet, these same factors hold keys to tailored solutions and present blue ocean opportunities. Tapping into the needs of the specific people groups in these regions as well as their governments’ support, could offer unique growth and market entry opportunities. For example, one of the first executive orders Kaduna State Governor, Senator Uba Sani, signed was that of financial inclusion; due to this push, over 2 million people now use financial services.

Why CX and UX Integration Matters in Fintech

Customer Experience (CX) and User Experience (UX): In recent times, there has been a shift in the design industry to merge the areas of Customer Experience (CX) and User Experience (UX), a move we personally believe has been long overdue.
To shed a little bit of light on these 2 areas: Customer Experience is more strategic in nature, focusing on the entire interaction customers have with an organization. User Experience, though originally meant to focus on the totality of the interactions that users have with an organization, settled on becoming more tactical. It centers more on the user’s interaction and experiences with digital products, often focusing on functionality, usability, and overall design of the solution.

For decades, these 2 areas have been managed separately. Yet, much value exists in bringing them together. This ensures that the micro-level user experience aligns with the macro-level strategic vision of Customer Experience. The result is competitive, high-quality services across all customer touchpoints.
Both disciplines are similar in that they place users at the center of the solution process. In Nigeria’s current customer service landscape, companies that use both strategically and effectively will gain an advantage. This sector is heavily customer-facing. For fintechs, it offers a huge opportunity to build brand loyalty and win market share, both online and offline. With the affordances that emerging technologies allow, new experiences can be designed for highly competitive customer experiences, with minimal costs and high creativity.
_{*Nielsen Norman Group}

Charting New Territories in Revenue Models

Charting New Territories: In the area of diversifying revenue models, there are exciting possibilities to innovate in a variety of areas, one of such is in the area of insurance, which has a penetration of about 1% or less in Nigeria. Regulatory hurdles and low consumer trust are no doubt challenges for finance houses; the rise of creative tech-enabled businesses that are emerging every day in this context opens up opportunity areas for FinTechs to innovate. By partnering with insurance providers who have already navigated regulatory roadblocks, fintechs can unlock a world of new possibilities. Beyond this, the sheer lack of competition in this space embodies a blue ocean opportunity waiting to be seized.

The Path Forward for Nigeria’s Fintech Growth

The diverse needs of Nigeria’s population present so many opportunities for innovation. There are solutions yet unborn and markets yet to be explored. Our research uncovered even more untapped areas, making this an incredibly exciting time for both established and emerging FinTechs. But quite frankly, the question isn’t whether opportunity exists, it is who will move fast enough to seize them first?

As fintechs explore opportunities and investigate the needs of different demographics, they must not lose sight of a key principle. Deliver simple, smarter, tech-enabled, and human-centered offerings that respond to the diverse lifestyles of Nigeria’s people.