The FinTech sector in Africa is poised for exponential and rapid growth that will challenge existing financial services providers, despite the fact that it is in the early stages of adoption relative to the rest of the world.
According to recent Frost & Sullivan analysis, the FinTech industry in Africa may experience a similar disruption seen in Australia, a country with financial services development comparable to South Africa.
The financial sector in Australia is set to take $10 billion in revenues away from the big Australian banks and contribute $3 billion of new revenue from 2015 to 2020.
On 18 August 2016, Frost & Sullivan will be hosting a FinTech Think Tank session at the Growth Innovation Leadership (GIL) Africa congress that will explore the African FinTech opportunity and look at how solutions can be adapted to suit Africa’s unique needs.
“The African continent has embraced mobile communications at a faster rate than other parts of the world, whilst also pioneering mobile technologies such as MPESA, through which almost 50% of payments are being made by Kenyans,” notes Wayne Houghton, Director of Growth Implementation Solutions for Africa at Frost & Sullivan.
“Africa’s under-developed banking infrastructure means that the FinTech wave will more likely be an enabler of financial inclusion than the typical disruption seen in more developed markets. With at least 60% of the adult population on the continent still without a bank account, Africa offers significant opportunity for the industry.”
Globally, an increase in the use of Algorithm-based banking and Robo-Advice is set to significantly affect the Financial Planning market and it is only a matter of time before these trends find application in Africa.
Artificial Intelligence (AI) systems are already being used in social media networks to manage the Digital Ecosystems of established financial institutions enabling for a more uniform consumer experience amongst diverse types of services.
For example, MyBucks is taking advantage of the power of AI systems to assess the credit-worthiness of customers in the African market, where the required data points for modeling default rates have previously been notoriously difficult to acquire.
“MyBucks and TagPay have already joined the growing list of international companies to have taken an interest in Africa’s FinTech industry, competing with local startups such as Kenya Fintech, SnapScan and Rainfin,” states Houghton. “Existing South African financial services providers are beginning to appreciate the threat and the opportunity FinTechs pose. Some have embraced open innovation as a way to explore these types of opportunities and understand how to make them relevant for the local market. In South Africa, we have already seen the emergence of Standard Bank’s WeChat Wallet. And predictions globally suggest that Apple Pay and Android Pay will be the next revolution in banking, with a number of bets being placed on the emergence of a ‘Facebook bank’.”
Highlights of the “FinTech Think Tank“ workshop will include:
- To what extent will the FinTech sector enable or take away revenue from the traditional South African financial services sector?
- Could the emergence of a Facebook-based bank, or similar social media service, alter the market dynamics, and how can this benefit the African consumer?
- How will Blockchain innovations impact the South African banking industry, and will crypto-currencies such as Bitcoin take off?
The workshop will be take place at the Growth, Innovation and Leadership (GIL) 2016: Africa congress at the Table Bay hotel inCape Town.
With over 200 industry experts and visionaries in attendance, GIL 2016: Africa will be a remarkable platform to discuss and deliberate the future of business, convergence of new business models, Mega Trends and disruptive technologies.
