How $483.98bn cloud computing can boost financial performance of Nigerian FinTech firms

By Onome Amuge 

The COVID-19 pandemic, despite some of its adverse impact on the global economy, marked an acceleration in technology adaptation, presenting a unique opportunity for the FinTech industry to contribute to economic recovery and development.

With the support of advanced technologies  Fintech companies have been able to offer faster, more convenient, and user-centric financial services to individuals and businesses. One of such technologies is cloud computing, recognised as the delivery of computing services, including servers, storage, databases, networking, software, analytics, and intelligence over the Internet (the cloud) to offer faster innovation, flexible resources, and economies of scale.

According to Grandview Research, the global cloud computing market was valued at $483.98 billion in 2022 and is expected to expand at a compound annual growth rate (CAGR) of 14.1 per cent from 2023 to 2030. The market is expected to witness growth due to factors, such as the functional ability of cloud computing to improve business performance in large enterprises,the rising need for hybrid models & Omni-cloud systems, and pay-as-you-go models.

The development has made it pertinent for Nigerian entrepreneurs to scale up their digital operations, enhance their value propositions, and tap into the immense opportunities the technology offers.

With this in view, the Fintech Association of Nigeria (FinTech NGR) and Huawei Cloud recently released the  Nigerian FinTech Cloud Adoption White Paper ,where they highlighted its significance in addressing the key challenges faced by Nigeria’s FinTech.

They noted that the  cloud adoption white paper framework is designed to assist small and medium size enterprises (SMEs) in migrating to, utilising, and managing the cloud effectively, thereby facilitating accelerated cloud-based transformation within the FinTech sector.

The Nigerian FinTech Cloud Adoption White Paper examines six broad segments within the industry including payments, mobile money and digital banking; lending; savings, investment, and crowdfunding; enterprise services and infrastructure; cryptocurrency; and insurTech.

According to the 98 page white paper document , FinTech, with its focus on innovation, efficiency, security, and reliability, embraces cloud-based infrastructure as a key enabler for achieving these goals.

The white paper also highlighted the key benefits of cloud computing and the challenges.

“Cloud computing plays a critical role in the future of FinTech in Nigeria. However, several challenges impede the rapid adoption of cloud services in the industry. These challenges include complex and outdated approval processes, data retention and security concerns, fierce competition, security risks due to fast development, external attacks stemming from big data channels, and difficulties with data isolation,” the white paper said.

However, to address the challenges, the Nigerian FinTech Cloud Adoption White Paper emphasises the importance of considering four key aspects of cloud adoption within the industry to include: regulatory compliance, cloud security, cloud native infrastructure, and operational costs.

Giving details of the four key aspects of cloud adoption, the white paper provides insights into how Nigerian FinTech enterprises on Huawei Cloud comply with international and local laws and regulations, ensuring regulatory requirements are met.

In the area of cloud security, it explained that the Huawei Cloud would present a comprehensive security framework and success cases, assuring FinTech enterprises of robust security measures necessary for cloud migration.

The white paper emphasises the significance of a cloud-native infrastructure and distributed FinTech architecture for successful digital and cloud transformation within the industry. It also explained that the management framework outlined in the white paper offers decision-makers in FinTech enterprises a thorough analysis of cloud operational costs based on a cloud architecture.

Speaking at the launch of the Nigerian FinTech Cloud Adoption White Paper, Paul Adigu the vice president, Huawei Cloud, said that  the white paper highlights the growing international recognition and consumer acceptance of Nigerian FinTech solutions. Adigu added that the collaboration between FinTech NGR, and Huawei Cloud, aims to foster stronger synergies between FinTech startups and established enterprises, providing a platform for accelerated growth and innovation.

Lanre Oladimeji, group head from Zenith Bank, said the Nigerian FinTech’s Cloud Adoption White Paper serves as a comprehensive analysis of the current state, requirements, and challenges of the FinTech industry in Nigeria, providing practical solutions through cloudification, which deserves to be appreciated.

On his part,Olu Akanmu, the CEO and founder of OPay Nigeria, who narrated the success story about the collaboration between Huawei Cloud and OPay, said, “As a foremost agency banking network in Nigeria, with over 26 million customers and over 500,000 agents across Nigeria, OPay partnered Huawei Cloud on its intelligent smart cloud infrastructure to make its mobile money platform more agile, accessible and robust for improved customer experience.”

According to Akanmu, the partnership helped OPay to create very high transaction concurrency and to expand its transaction base rapidly, without experiencing operational downtime, and with low latency time.