Software body urges banks to invest in startups

folarin okunola

August 4, 2015 9:33 AM

As technology startups steadily penetrate traditional banking segments, including payments, wealth management and billing, global banking giants are not sitting on the sidelines.

ISPON President, Mr. Pius Okigbo

An umbrella body for indigenous software companies in the country, the Institute of Software Practitioners of Nigeria (ISPON), has recommended that Nigerian banks should toe the steps of their foreign counterparts by investing in technology startups.

As technology startups steadily penetrate traditional banking segments, including payments, wealth management and billing, global banking giants are not sitting on the sidelines. Since 2009, six major American banks - Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase, Morgan Stanley, and Wells Fargo - have made strategic investments in 30 technology companies, according to CB Insights data.

In a statement issued by ISPON and signed by its president, Pius Okigbo, the institute commended Nigerians banks for their foresights in funding various tech startups in the late 1990s and 2000s such as Interswitch, ValuCard (Unified Payments Limited), ATMC, NIBSS, Credit Registry and CRC Credit Bureau, which were all financed by various consortia of Nigerian banks.

ISPON suggested that a second wave of investments in tech startups would require the establishment of Special Purpose Vehicles [SPVs] just as its been in other global major markets.

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