Fintechs can grow Nigeria’s retail investor base tenfold in five years — Sycamore MD

In this interview, Oluwagbenga Magbagbeola, managing director, Sycamore Investment and Asset Management, discusses the firm’s new chapter, regulatory shifts, the future of retail investing, and how embedded finance and AI will reshape Nigeria’s capital markets with TEMITAYO JAIYEOLA.

Sycamore started in peer-to-peer lending, and now you are entering regulated asset management. What shifted for you, and the market, to make this the right move now?

Our move into regulated asset management is more of an evolution than a pivot. It is a direct response to what our customers have consistently asked for. Since launching in 2019, we have built a solid foundation in lending, serving nearly 300,000 users. But increasingly, these customers wanted broader tools to grow and protect their wealth.

The market timing couldn’t be better. Nigeria’s economic landscape has undergone significant changes, with persistent inflation and currency volatility creating an urgent need for sophisticated investment solutions that preserve value while generating returns. Traditional banks aren’t adequately addressing these challenges for everyday Nigerians, creating a significant opportunity gap.

Securing our SEC license enables us to merge traditional investment expertise with technology at a time when it’s most needed. With over N10 billion in assets already under management, we have shown we can responsibly manage capital. The regulatory backing gives us the foundation to scale while maintaining the highest standards of investor protection.

As traditional asset managers and fintech startups converge, where do you see the real competitive battleground?

The true battleground lies in three core areas: accessibility, personalisation, and user experience.

Traditional asset managers offer deep expertise and strong risk frameworks, but they often struggle with digital transformation and remain out of reach for many Nigerians due to high entry thresholds. On the other hand, fintechs lower these barriers and offer seamless user experiences, but may lack institutional depth and robust compliance systems.

The real winners will be those who successfully blend both worlds, combining institutional-grade investment capabilities with fintech’s agility and accessibility. At Sycamore, we are building this hybrid model by integrating capital markets professionals with technologists to offer smart, user-focused solutions.

Data will become the new battleground, specifically, who can best use it to deliver personalised investment strategies that adapt to market and individual conditions. That is a major shift from the old one-size-fits-all fund model and requires both tech and expertise to get right.

Retail investors have become a major force post-pandemic, but Nigerian capital markets still face liquidity and volatility challenges. How do you think the industry can realistically scale retail investing?

Scaling retail investing in Nigeria requires removing four key barriers: accessibility, education, trust, and product relevance.

First, we must lower barriers to entry. Traditional minimum investment thresholds of N100,000 to N500,000 immediately exclude most Nigerians. Technology now enables fractional and micro-investments, allowing people to start with as little as N8,000, which significantly expands the potential investor base.

Second, we need to reimagine investor education. Financial literacy efforts must evolve beyond theoretical concepts to practical, actionable guidance delivered through digital channels. At Sycamore, we integrate educational components directly into our communications, creating learning journeys that guide investors as they make investment decisions.

Third, trust-building must become systematic. The industry needs greater transparency around fees, risks, and performance reporting. Regulatory oversight helps, but firms must go beyond compliance to proactively demonstrate their commitment to investor protection.

Finally, product innovation must address current economic realities. With inflation and currency depreciation being primary concerns, investment products that offer protection against these forces, like our USD-denominated offerings, will drive adoption by solving tangible problems.

If the industry addresses these four dimensions simultaneously, we can realistically expand Nigeria’s retail investor base tenfold within five years, creating a more liquid, stable, and inclusive capital market.

With ISA 2025 introducing stricter compliance and investor protection frameworks, how do you expect the structure of Nigeria’s digital investment sector to change over the next 5 years?

The updated Investment and Securities Act (ISA) marks a major shift and will reshape the sector in four key ways.

First, we will see industry consolidation. Tighter compliance will raise operational costs, squeeze out undercapitalised players and encourage mergers and strategic alliances.

Second, the legitimacy that regulation brings will attract more institutional players. We will see more partnerships between fintechs and traditional institutions, resulting in credible, innovative hybrid models.

Third, specialisation will emerge. Instead of platforms trying to be everything to everyone, we’ll see focused players targeting specific asset classes or investor types, driving deeper innovation.

Fourth, robust investor protections will build broader retail confidence. As trust grows, so will participation, especially from previously hesitant demographics.

From an industry perspective, are current regulatory timelines and frameworks agile enough to keep pace with innovation?

This is a critical issue. The honest answer is, that we are getting there, but not quite yet. To the regulators’ credit, especially the SEC, we have seen progress. The updated ISA and introduction of regulatory sandboxes signal a willingness to adapt and support innovation. These are meaningful steps.

However, approval processes still tend to lag behind innovation cycles. Uncertainty around timelines and overlapping oversight from bodies like the SEC, CBN, and NDIC can slow things down. The pace of tech evolution is outstripping policy development.

What we need is collaborative regulation—frameworks developed in active partnership with industry stakeholders. At Sycamore, we see regulation not as a barrier but a partnership, and that’s helped us secure approvals like our SEC and earlier FCCPC licenses.

Regulatory agility is improving, but stronger collaboration will be key to balancing innovation with investor protection.

How do you see tech reshaping client acquisition, product delivery, and portfolio personalisation in the asset management space?

Technology is fundamentally transforming every dimension of asset management, shifting it from a service exclusive to a select few to a scalable platform accessible to millions.

Technological innovation has dramatically reduced client acquisition costs through digital channels. Our mobile-first approach enables us to onboard customers efficiently, eliminating the need for physical branches and expanding our reach to previously underserved areas. Data analytics allows us to identify and address specific customer segments with tailored messaging that resonates with their unique financial needs.

In product delivery, technology has created entirely new distribution channels. Our mobile app revolutionises the way clients manage their investments, offering real-time portfolio visibility, seamless transaction capabilities, and integrated educational resources. This creates a fundamentally different customer experience than traditional quarterly statements and scheduled advisor meetings.

The most profound impact, however, is portfolio personalisation. Our proprietary platform analyses individual risk profiles, investment goals, and market conditions to create personalised allocation strategies on a large scale. This represents a paradigm shift from the traditional model, where personalisation was only available to the wealthiest clients. AI and machine learning enable us to continuously optimise these allocations in response to changing market conditions and individual circumstances.

Looking ahead, technology will enable even more granular personalisation, where portfolios are dynamically adjusted not only based on risk tolerance but also on individual values, life circumstances, and consumption patterns. This level of customisation will make investing feel less like a separate financial activity and more like an integrated part of everyday economic life.

We are seeing AI play a more prominent role across sectors. How is it disrupting your space?

AI is transforming asset management from a primarily human-driven discipline to an augmented intelligence model where technology enhances human expertise rather than replacing it. This disruption is occurring across three critical dimensions of our business.

In investment analysis, AI systems now process vast quantities of market data, identifying patterns and correlations that might escape human analysts. At Sycamore, we leverage machine learning to analyse market trends across multiple asset classes and currencies, enabling more responsive portfolio adjustments. This capability is particularly valuable in Nigeria’s volatile market conditions, where rapid adaptation can significantly impact returns.

For risk management, AI enhances our ability to identify potential vulnerabilities in client portfolios. Our systems continuously stress-test allocations against various market scenarios, flagging potential concerns before they materialise. This proactive approach is essential as we democratise investment access to less experienced investors who may not recognise emerging risks.

Perhaps most transformatively, AI is revolutionising personalisation at scale. Traditional asset managers could only provide truly personalised service to their wealthiest clients due to capacity constraints. Our AI-powered platform delivers tailored investment strategies to every client regardless of portfolio size, analysing individual goals, risk tolerance, and even behavioural patterns to create optimised allocations.

Importantly, we view AI as complementary to human expertise rather than a replacement. The most effective model combines technological capabilities with human judgment, particularly in areas that require a contextual understanding of local market nuances or regulatory considerations. This hybrid approach delivers superior outcomes compared to either technology or human expertise in isolation.

Across the market, we are seeing a shift towards alternative investments such as crypto and tokenised assets. How much appetite do you think Nigerian investors truly have for these products, beyond the early adopters?

Nigerian investors have demonstrated a remarkable appetite for alternative assets, particularly cryptocurrencies, despite significant regulatory and practical challenges. This signals a broader search for investment options that solve specific problems in our economic context, notably, protection against currency depreciation and inflation.

However, the current demand only represents the beginning of a much larger potential market. Early adoption has been driven primarily by tech-savvy, risk-tolerant investors willing to navigate complex interfaces and regulatory uncertainty. Adoption will expand dramatically to include more mainstream investors as these barriers diminish through improved user experiences and regulatory clarity.

What is particularly exciting is how crypto often acts as a gateway. Once people get comfortable with digital assets, their interest expands to tokenised real estate, fractional ownership of physical assets, and tokenised securities. These tools offer access to previously unavailable asset classes.

Many investors are drawn to alternatives because they address real-world problems, such as wealth preservation, portfolio diversification, and access to global markets. By addressing these core needs through regulated, accessible investment vehicles, we can meet the demand while maintaining appropriate investor protections.

With regulators now exploring frameworks for crypto and tokenised assets, what opportunities and risks do you see in integrating these investments into our capital markets?

The formal recognition of digital assets in Nigeria’s regulatory framework represents a significant evolution, creating substantial opportunities and important considerations for our capital markets.

The primary opportunity lies in broadening participation and liquidity. Digital assets and tokenisation can significantly lower barriers to entry, enabling fractional ownership of previously indivisible assets, such as real estate or infrastructure projects. This can unlock significant capital from retail investors while providing them with access to asset classes that were previously available only to institutional investors.

Another significant opportunity is in settlement efficiency. Blockchain-based systems can reduce transaction costs and settlement times compared to traditional market infrastructure, addressing some operational challenges in our capital markets.

However, these opportunities come with legitimate risks that must be carefully managed. Regulatory frameworks must address concerns around asset verification, custody security, market manipulation, and investor protection without stifling innovation. The volatile nature of many digital assets also presents challenges for inclusion in balanced portfolios.

With Nigeria’s high inflation and currency pressures, what kind of investment themes are you prioritising as you build your asset management product line?

Our product strategy directly addresses the economic realities facing Nigerian investors today. Three key investment themes are guiding our approach:

First, currency diversification. Our multi-currency platform lets investors allocate across the naira and major foreign currencies like USD, EUR, and GBP. Our USD-denominated products are specifically designed to protect capital and generate returns in a volatile macro environment.

Second, global access. Nigerian investors need exposure beyond local markets. We are building products that provide simple, compliant access to global equities and fixed income.

Third, real assets. This includes structured products that provide exposure to real estate, commodities, and other tangible assets, which have historically maintained their value during inflationary periods. These investments serve as a balance to purely financial assets in a well-constructed portfolio.

Across all these products, we are keeping entry points low. We believe everyday Nigerians deserve the same protection from economic shocks as high-net-worth individuals.

If you had to bet on one transformational shift in Nigeria’s capital markets over the next five years, what would it be?

If I were to bet on one transformational shift, it would be the emergence of embedded investment – the seamless integration of investment capabilities into everyday financial activities and non-financial platforms.

Today, investing remains largely a separate, deliberate activity. You decide to invest, open a specific investment account, transfer funds, and make allocation decisions. This friction limits participation and creates an artificial separation between spending, saving, and investing decisions.

Within five years, I believe investment will become an invisible, embedded feature across financial and non-financial services. Your banking app will automatically allocate excess funds to personalised investment portfolios. Your e-commerce platform will offer micro-investments alongside purchases. Your salary payment system will enable automatic diversification across currencies and asset classes.

This transformation will be enabled by API-driven infrastructure, regulatory frameworks that support delegation and microtransactions, and AI that can make intelligent allocation decisions based on individual circumstances. The result will be dramatically higher participation rates as the artificial barriers between everyday financial activities and investment disappear.

This shift has profound implications for Nigeria specifically. Our young, digitally native population is already comfortable with mobile financial services. By embedding investment capabilities into platforms they use daily, we can create a generation of investors who build wealth through consistent micro-investments rather than occasional large allocations.