Biggest technological casualties in 2021 and identified lessons we can learn from them
Biggest technological casualties in 2021 and identified lessons we can learn from them
There are numerous ways in which the technology ecosystem is rapidly evolving. It is becoming more likable than ever before as a result of the enormous opportunities it provides.
When the numbers were crunched, it became clear that a significant portion of 2021's innovative yet notable startups had at least one foot in the tech community, if not both. This decision provided them with the direction they needed in order to launch their campaign successfully.
While some businesses benefited from the ecosystem and were able to successfully pivot, others struggled to stay afloat, and not everyone was able to make it through the year without being affected by something.
Central Bank of Nigeria has frozen the accounts of Bamboo and Risevest
Following a court order from the Abuja High Court, the Central Bank of Nigeria ordered the freezing of six online investment companies in August of this year, according to the Financial Times.
The companies involved were Bamboo Systems Technology Limited, Rise Vest Technologies Limited, Bamboo Systems Technology Limited OPNS, Chaka Technologies Limited, CTL/Business Expenses, and Trove Technologies Limited. Bamboo Systems Technology Limited OPNS was a subsidiary of Bamboo Systems Technology Limited.
According to court documents, the accounts were to be blocked for a period of 180 days after they were blocked.
They connect Nigerians to stocks, bonds, and other securities on both the domestic and international markets, and their popularity has increased in recent years, particularly among young people.
The Central Bank of Nigeria (CBN) accused the companies of engaging in "illicit forex transactions" and stated that it would require additional time to complete its investigation, citing the reasons for the court order.
The Central Bank of Nigeria (CBN) was not alone in issuing a statement; the Securities and Exchange Commission (SEC) had previously declared that the companies' investment services were illegal.
Despite the fact that Bamboo and Risevest responded to the decision by assuring customers that their investments were safe, the court order was an incident that the companies wished had never happened.
Patricia and Paga's move
It was not only the CBN directives prohibiting cryptocurrency trading that led to a suspension of trading through banks and an increase in P2P activity, but they also resulted in capital flight as cryptocurrency investors fled to safer havens in the United States.
Among those companies that toed this line was Patricia Technology Limited. The company proudly announced in July that it had relocated its operations to the Republic of Estonia, with its headquarters now based in the northern European country.
Following a tumultuous life at the hands of Nigeria's regulators — the Securities and Exchange Commission, followed by the Central Bank of Nigeria — this global movement is expected to strengthen the company's relationships.
In addition to Patricia, a number of other cryptocurrency businesses in Nigeria have shuttered their doors. The payment company Paga, which is one of the country's largest, has been phasing out Nigeria as its primary administrative hub for some time, long before Patricia's recent relocation.
Following a recent relocation, the payments company has established its headquarters in Mauritius, a small island nation off the coast of East Africa.
In a statement, Tayo Oviosu, CEO and co-founder of Paga, stated that "the tax benefits of Mauritius can be obtained onshore in the United Kingdom or offshore in the United Kingdom, Netherlands, or Luxembourg." He also stated that he would never establish another company in Mauritius, apparently out of annoyance with the government.
Binance, Quidax, Buycoins Africa, and Bundle hit by the Central Bank of Nigeria's crypto ban
Crypto trading platforms announced their compliance with the Central Bank of Nigeria's crypto ban after the CBN announced that banks should cease facilitating crypto trading activities in the country. This is a significant blow to Nigeria's crypto scene, which has suffered a significant setback.
Binance, the most well-known cryptocurrency exchange in the world, notified its customers via Twitter that it had received notification from channel partners that NGN deposits and withdrawals would be impacted.
In response to the Nigerian Apex Bank's directive, the company anticipates that Nigerian banks will cease working with cryptocurrency exchanges, resulting in an increase in peer-to-peer trading.
While the Central Bank's directive does not expressly criminalize cryptocurrency ownership, it does make it more difficult for trading firms to process debit, credit card, and bank transfer transactions in the United States and elsewhere.
For this reason, most fintech startups, such as Paystack, Flutterwave, and Korapay, collaborate with deposit money banks, non-financial institutions, and other financial organizations in order to conduct business with Nigerian bank customers.
Trading platforms such as Quidax, Buycoin, and Bundle also released statements assuring users that their funds were safe. Despite this, the directive caused their operations in the country to be significantly slowed.
The CBN's announcement resulted in a halt to direct cryptocurrency trading on these platforms, but increased the volume of P2P trading.
P2P trading enables cryptocurrency exchanges to continue to operate in the United States. Customers, particularly first-time scam victims, are more likely to fall victim to scammers as a result of this practice.
Deactivation of virtual accounts at Providus Bank
In the past, enterprise banks and Fintech startups did not get along well, but in today's constantly changing digital environment, as well as after several years of market changes, the two companies must work together.
To be sure, setting up the connection is time-consuming, but it is essential for the banking industry to transition from an antiquated system to one that engages customers in the digital age.
However, because of the interdependence of the two industries, there is frequently constant conflict and bickering between them.
In February, Providus Bank abruptly deactivated all virtual accounts, affecting fintech startups such as Piggyvest, Cowrywise, and Monnify, to name a few examples.
Users of fintech platforms such as Piggyvest and Cowrywise were unable to complete transactions using their Providus accounts as a result of the company's decision to close virtual accounts in April.
The bank stated that the closure of the virtual accounts was necessary in order to conduct a system review in accordance with the Central Bank of Nigeria's "new rules." The bank, on the other hand, has stated that the closure is only temporary in nature.
According to the statement, the action appears to have been prompted by the Central Bank of Nigeria's directive prohibiting banks from engaging in cryptocurrency-related activities.
When Providus abruptly shut down, it demonstrated Nigerian fintechs' reliance on traditional banks, which is ironic given that fintechs are widely regarded as the best candidates to gradually phase out traditional banks in the long run.
As a result of this experience, the following lessons have been learned:
As a result of an infuriating business environment, which has been exacerbated by the government's restrictive policies, as well as a number of other factors, the Nigerian technology sector has suffered.
The majority of the country's technology companies are small and are still in their early stages of development. In spite of the lengthy list of contentious issues, there are some important lessons that have been learned so far.
However, only if the company providing the technology is willing to go to such lengths as to completely transform the customer experience will this potential be realized. The experimentation with technology consumes far too many businesses' efforts, and they lose sight of the reasons for their existence.
Businesses, regardless of their product, must place the needs of their customers first as they chart their course to success, which will undoubtedly include numerous obstacles along the way.
The ability for other technology companies to learn from the mistakes of others is critical in order for them to avoid wasting time resolving the same issues and to be able to move forward more quickly.
Customers' preferences, regulatory changes, and market disruptions are all factors that must be considered by technology companies when developing their business strategies and plans. A critical component of their success is their ability to identify strategy decay and redesign business models while allocating resources to trials and intrapreneurship.
Several successful technology companies have mastered the art of instilling a benign culture of innovation within the confines of a formal organization. This is known as "culture engineering." They give creatives the freedom to express themselves, but they also place restrictions on them.
