Digital Banker Africa Autumn 2023

IN PARTNERSHIP WITH

MASTERCARD

FIRSTBANK: EMPOWERING LIVES THROUGH FINANCIAL INCLUSION

BANKING ON CHANGE: AFRICA’S ROLE IN GLOBAL PARADIGM SHIFT

THE INFLUENCE OF DIGITAL BANKING IN

AFRICA’S ECONOMIC UPTURN

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DIGITAL BANKER AFRICA I CONTENTS

CONTENTS 12 16

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How digital financial services have revolutionised the lives of Africans

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Transforming Lives Digital Banking’s Impact on Financial Empowerment in Africa

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Emerging Role & Positioning of Fintech in Driving the Inclusivity of Instant Payment Systems (IPS) in Africa

Communal Upliftment: Narratives showcasing the cascading effects of digital banking in boosting local economies and fostering community development.

Fintech for Good Harnessing Technology for Social Impact in Africa

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Banking on Change: Africa’s Role in Global Paradigm Shift

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FirstBank Empowering Lives Through Financial Inclusion

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50 42

Navigating the AI Frontier Lessons from OpenAI’s Leadership Struggle

Securing Tomorrow Navigating the Cybersecurity Challenge in Africa’s SME Digitisation Revolution

The Evolutionary Influence of Digital Banking on Economic Upliftment in Africa

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Pioneering Progress: Unleashing Universal Solutions in Africa’s Financial Evolution

Celebrating Excellence in African Fintech The Digital Banker Africa Awards

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Digital FinTech Odyssey Navigating E-Commerce Challenges and Innovations in Africa Open Banking in Africa Riding the Wave of Innovation & Inclusion

Blockchain Unleashed A Comprehensive Overview of its Evolution and Impact on Africa in 2023 9

DIGITAL BANKER AFRICA I FOREWORD

Welcome to the Autumn edition of

DBA 2023!

Our contributors, thought leaders, and industry experts come together to weave a narrative that celebrates the triumphs and sheds light on the opportunities that digital banking presents for Africa. Join us in exploring the vast landscape of financial empowerment, where innovation meets tradition, and where the fusion of technology and

W

is becoming a catalyst for change, a force that empowers and uplifts, and a key driver in forging a path towards economic prosperity.

finance creates a powerful synergy

the stories that resonate with the

Africa is not just embracing the digital revolution; it is harnessing its power to reshape destinies and fuel progress. This edition delves into the heart of how digital banking

As we navigate the pages of Digital Banker Africa Magazine, you will encounter compelling narratives of success, stories of businesses flourishing against all odds, and the profound impact of digital banking on the everyday lives of people across the continent. From remote villages to bustling urban centres, the digital financial wave is leaving no stone unturned in its mission to democratise access to financial services and empower individuals to take control of their economic destinies.

e are thrilled to present a vibrant tapestry of insights and stories in this edition, centred around the transformative theme, “Transforming Lives: Digital Banking’s Impact on Financial Empowerment in Africa.” In a continent pulsating with innovation and resilience, our focus is on the remarkable journey of digital banking and its profound influence on individuals, businesses, and communities.

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for change.

We invite you to immerse yourself in the pages ahead, to discover heartbeat of Africa’s economic transformation. Here’s to the unstoppable spirit of progress and the role of digital banking in shaping a future where financial empowerment becomes a reality for all.

Welcome to a journey of inspiration, empowerment, and the transformative power of Digital Banking in Africa!

Happy reading!

CONTRIBUTORS LIST I DIGITAL BANKER AFRICA

THANK YOU TO OUR CONTRIBUTING WRITERS IN DBA AUTUMN 23 DR ADESOLA ADEDUNTAN Chief Executive Officer FirstBank Group

CHIPO MUSHWANA Executive Emerging Innovation & Payments NedBank

DANIEL AWE Head of Africa FinTech Foundry (AFF)

FAHEEM ALI Digital Transformation, Tech Leader, & Financial Inclusion Expert

JACQULINE JUMAH Director, Advocacy & Capacity Development AfricaNenda

KUMARAN SELVARAJALU Payments Division The Banking Association South Africa

OSAHON AKPATA Group Head, Consumer Payments Ecobank Transnational Incorporated

Editor: Anthony Bempong Executive Editor: Noel Morrison Deputy Editor: Henry Scott Art Director: Pritesh Patel Layout Designer Abdhesh Kumar Jha Chief Sub: Kwabena Mensah Bonsu Head of Online Development: Lee-Anne Doughlin Online Development: Gerald Hutchfull, Paulette Davidson Subscription Manager: Stephen Rock Marketing Manager: Siobhan Copland Marketing Assistant Jason Hall, Nikki Jadine Circulation manager: Nathan Asare Head of Sales: Michael Scott Production Editor: Rebecca Mcglynn Business Development: James Walters, Lloyd Quansah, Paul Da Associate Producer: Dean Kirby Head of Accounts: Wayne Sykes Publisher: Percival Marshall ISSN 2752-4485 www.digitalbankerafrica.com Images by www.istock.com All information contained in this publication has been obtained from sources the proprietors believe to be correct, however no legal liability can be accepted for any errors.

No part of this publication can be reproduced without prior consent from the publisher.

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COMMUNAL UPLIFTMENT:

NARRATIVES SHOWCASING THE CASCADING EFFECTS OF DIGITAL BANKING IN BOOSTING LOCAL ECONOMIES AND FOSTERING COMMUNITY DEVELOPMENT. “In some parts of the world, cash is in decline. But Africa is not ready to go cashless because digital payments don’t yet work for everyone. The consequences to society and individuals of not having a viable way of paying for goods are potentially severe. Consumers need a guarantee that they can access and use cash for as long as they need it.

This requires us to radically review our cash infrastructure – something that is now pressing, as cracks in the system are showing. At the same time, we need to ensure that digital payments can eventually become a choice for everyone.”

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leepwalking into a cashless society will leave millions behind.

Action is needed now.

Ten years ago, six out of every ten transactions were in cash. Now it’s three in ten. And in fifteen years’ time, it could be as low as one in ten. Small business associations are concerned about the growing challenges of handling cash: the closure of bank branches and rising charges make it more expensive and riskier to handle cash. Rural communities see an increasingly digital world that only works for those with broadband and mobile connectivity. And the commercial players supporting the cash infrastructure are questioning how a model built for a high-cash economy can be economically viable when most payments are made digitally.

The convenience of digital payments has made them the first choice of payment for many. New technology is making digital payments even easier, but there are some areas of society where cash payments still dominate. A straight-line trajectory of current trends would see an end of cash use by 2026. However, I believe that cash will still be here in 15 years’ time, but potentially accounting for as few as one in every ten transactions.

In the same vein, it’s hard to discuss cash without addressing its role in the grey (informal) economies.

There is clear evidence that cash plays a large role in facilitating transactions. On the other extreme, some proponents of a lower cash society go further to argue that lost tax revenue from cash-in-hand payments is damaging society, and that digital payments would bring such payments back into the tax system. I don’t disagree with these points and believe that a cashless society has many benefits, including the reduction of crime. There are undoubtedly benefits from the reduction in cash in terms of lower crime and higher tax revenues, but we must not demonise those who operate in cash when many have no choice. Solutions adopted by other countries, such as Sweden, to bring the grey economy into the formal economy through tax breaks and peer-to-peer payment technology, thereby isolating the “grey” economy to attack it more directly, might be an option but not a decision to be taken lightly and one for policymakers to consider.

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Undoubtedly, digital banking has been a game-changer for many Africans, offering them improved access to financial tools, literacy, and freedom. Here’s how digital banking has transformed the financial landscape for everyday Africans:

Increased financial inclusion: Digital banking has made financial services accessible to a wider population in Africa. Many Africans previously had limited access to traditional banking services due to factors like physical distance, high costs, and lack of documentation.

Digital banking has bridged this gap, allowing individuals to open accounts, make transactions, and access a range of financial services using their mobile phones or computers.

Convenient and affordable banking: With digital banking, Africans no longer have to travel long distances to physical bank branches, saving time and transportation costs.

Mobile banking apps and online platforms enable Africans to perform various banking activities conveniently, such as checking balances, transferring funds, paying bills, and even applying for loans. As a result, financial services have become more affordable and accessible.

Enhanced financial literacy: Digital banking platforms often provide educational resources and tools to improve financial literacy among users. Everyday Africans can access information on budgeting, savings, investment options, and other financial topics through these platforms. This helps individuals

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Chipo Mushwana Executive Emerging Innovation & Payments NedBank

make more informed decisions about their money, improve saving habits, and plan for their financial futures.

Mobile money revolution: Mobile money has been a significant component of digital banking in Africa. Services like M-Pesa in Kenya and EcoCash in Zimbabwe have revolutionised the concept of “cashless” transactions. Africans can now send and receive money, pay for goods and services, and even receive their salaries directly onto their mobile phones. Mobile money has particularly benefited those lacking formal bank accounts, creating opportunities for entrepreneurial activities and economic empowerment.

Access to credit and savings: Digital banking has expanded access to credit and savings products for everyday Africans.

Through digital platforms and apps, individuals can access small loans, microfinance services, and savings accounts.

This opens opportunities for individuals to start businesses, fund education, or deal with emergencies, fostering economic growth and stability.

Financial empowerment of women: Digital banking has played a crucial role in empowering women in Africa.

Women who may face cultural or practical barriers in accessing

traditional banking services can now utilise digital platforms to have control over their finances. Mobile banking apps enable women to independently manage their accounts, make transactions, and even access insurance and investment products, enabling them to contribute financially to their households and communities.

Innovation and entrepreneurship: Digital banking has spurred innovation and entrepreneurship in Africa.

Fintech start-ups have emerged, offering innovative solutions to everyday financial challenges, such as peer-to-peer lending platforms, digital wallets, and investment apps. This has created opportunities for Africans to engage in business activities and access capital, stimulating economic growth and job creation.

In conclusion, digital banking has transformed the financial landscape for everyday Africans, providing them with better access to financial tools, literacy, and freedom. It has increased financial inclusion, made banking services more convenient and affordable, and empowered individuals to take control of their finances. Digital banking has not only improved the lives of everyday Africans but also fostered economic growth and entrepreneurial spirit across the continent for everyone”

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FINTECH FOR GOOD HARNESSING TECHNOLOGY FOR SOCIAL IMPACT IN AFRICA A Paradigm Shift in Social Impact Fintech, the convergence of technology and financial services, has emerged as a transformative force in Africa, not only addressing the continent’s pressing financial inclusion challenges but also expanding its reach to address social and environmental issues.

This article explores how fintech is being leveraged for good in various sectors, from healthcare and education to agriculture and climate resilience.

Bridging Healthcare Gaps: Access to Healthcare for All Africa faces a significant healthcare access gap, particularly in remote and underserved areas. Fintech is bridging this gap by providing innovative solutions that expand access to healthcare services, enhance communication between 16

patients and providers, and facilitate the delivery of essential medications.

M-TIBA: A Text-Based Healthcare Platform In Kenya, the M-TIBA platform is revolutionising healthcare access by connecting patients with healthcare providers via text messaging. This innovative platform allows patients to consult with doctors, access medical information, and receive prescriptions, all through their mobile phones. M-TIBA has reached over 2 million users, providing basic healthcare services to individuals in rural areas who may otherwise lack access to traditional healthcare facilities.

Cowbell Kids App: Gamifying Education for Engaging Learning

Access to quality education is another critical challenge in Africa, particularly for children in rural and low-income communities.

Fintech is transforming education by providing digital learning platforms, enabling online courses, and facilitating micropayments for educational resources.

Gamifying Education for Fun and Engagement The Cowbell Kids App in Nigeria is a prime example of how fintech is gamifying education to make learning more fun and engaging for children. This app utilises mobile technology to create interactive learning experiences, utilising games, puzzles, and quizzes to enhance knowledge retention and learning outcomes.

The app has reached over 1 million users, expanding access to quality education for underserved communities.

Kilimo Salama: Empowering Farmers for Sustainable Agriculture Agriculture plays a crucial role in many African economies, but farmers often face challenges in accessing market information, securing loans, and mitigating risks related to weather and pests.

Fintech is empowering farmers to enhance their productivity and livelihoods by providing innovative solutions that address these challenges.

Digital Agricultural Marketplaces: Connecting Farmers to Markets Mobile-based agricultural marketplaces are connecting farmers directly with buyers,

providing them with access to market information, and facilitating e-payments. These platforms enable farmers to sell their produce at competitive prices, ensuring better returns for their labour and investments.

Kilimo Salama: Weather Forecasts, Microloans, and Crop Insurance In Kenya, the Kilimo Salama platform is providing a comprehensive set of services to support farmers’ livelihoods.

This platform offers weather forecasts to help farmers make informed decisions about planting and harvesting, crop insurance to protect against losses due to adverse weather conditions, and microloans to finance

agricultural activities. These services are helping farmers mitigate risks, improve crop yields, and enhance their overall agricultural practices.

Blockchain-based Platforms: Tracking Emissions and Facilitating Carbon Trading Fintech is also playing a role in addressing climate change challenges in Africa. Blockchainbased platforms are emerging as powerful tools for tracking carbon emissions, facilitating carbon trading, and supporting climate adaptation efforts.

Tracking Carbon Emissions for Transparency Blockchain technology can be used to track and record carbon emissions from various sources, such as industrial plants, agricultural activities, and transportation systems. This data can be used to measure progress in reducing emissions and identify areas for improvement.

Facilitating Carbon Trading for Sustainable Practices Blockchain-based platforms can also facilitate carbon trading, enabling companies and individuals to offset their 17

emissions by purchasing carbon credits from entities that have reduced their carbon footprint.

This exchange of carbon credits promotes sustainable practices and incentivises businesses to adopt renewable energy sources and reduce their environmental impact.

Climate Smart Agriculture Project: Resilience and Sustainable Practices In Rwanda, the Climate Smart Agriculture Project is using fintech to provide farmers with climateresilient seeds and training, helping them adapt to changing weather patterns and adopt sustainable agricultural practices. This project demonstrates how fintech can be harnessed to promote climatesmart agriculture, ensuring food security and sustainable livelihoods for farmers.

Challenges and Opportunities: Navigating the Way Forward

Skills Development and Financial Literacy: Empowering Individuals

Fintech for social impact holds immense promise, but there are challenges to address, such as:

Upskilling individuals with digital literacy and financial literacy is essential to ensure that they can fully benefit from fintech solutions.

Providing training and workshops on how to use fintech tools and understand financial concepts empowers individuals to make informed decisions, manage their finances effectively, and maximise the benefits of these innovations.

Data Privacy and Security: Protecting sensitive personal and financial data is crucial for user trust and long-term sustainability.

Scalability and Affordability: Ensure that fintech solutions are accessible to low-income communities and can effectively reach underserved populations.

Collaboration and Partnerships: Enabling Collective Impact Fostering collaborations between fintech companies, NGOs, governments, and local communities is essential to maximise the impact of fintech for social good.

Such collaborations can leverage the expertise and resources of various stakeholders, ensuring that fintech solutions are tailored to specific needs and effectively reach underserved populations.

Regulatory Frameworks: Guiding Innovation and Fostering Trust Developing appropriate regulatory frameworks that support fintech innovation while ensuring consumer protection and financial stability is crucial for the long-term sustainability of fintech for social impact. Clear and well-defined regulations can provide a safe and predictable environment for fintech companies to operate, while also protecting the interests of consumers and promoting responsible financial practices.

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Scaling Up and Sustainable Funding: Achieving Broad Impact Fintech for social impact requires sustainable funding mechanisms to support its growth and expansion.

Public-private partnerships, impact investing, and support from philanthropic organisations can play a crucial role in providing the necessary resources to scale up these initiatives and reach a wider range of beneficiaries.

Conclusion: A Continent on the Move Africa is at the forefront of the fintech revolution, harnessing technology to address social and environmental challenges. As fintech innovations continue to evolve, the continent has the potential to become a global leader in using technology for social good, driving inclusive growth and sustainable development. The challenges are significant, but the opportunities are immense. By addressing data privacy and security concerns, ensuring scalability and affordability, fostering collaborations, establishing clear regulatory frameworks, investing in skills development and financial literacy, and finding sustainable funding mechanisms, Africa can harness the power of fintech to create a fairer, more equitable, and more sustainable future for all.

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HOW DIGITAL

FINANCIAL SERVICES HAVE REVOLUTIONISED THE LIVES OF AFRICANS

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n an era marked by the sweeping tide of global digital transformation, Africa stands as a dynamic and innovative participant, harnessing the power of technology to revolutionise its financial services landscape.

The rise of digital financial services across the continent has ushered in an era of unprecedented change,

unlocking new possibilities, reshaping economic landscapes, and providing millions with a newfound sense of empowerment. This essay explores how digital financial services have revolutionised the lives of Africans, focusing on the overarching themes of individual empowerment, communal upliftment, and enterprise evolution.

In doing so, it reveals some of the progress that is being made, one digital transaction at a time, across the diverse nations and communities that make up this extraordinary continent.

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Personal empowerment for African consumers The African continent has

M-Pesa, over the next decade and a

To be sure, access to financial

witnessed progressive increases

half, this telco-led financial service

services remains a challenge in

in financial inclusion, largely

model has boomed and continues

several communities in Africa due

driven by mobile money and other

to serve hundreds of millions of

to several factors, including low or

technological advances, against

Africans today. Fintech firms have

irregular income, attitudes toward

a backdrop of limited banking

also joined the fray, disrupting

banking, proximity to a financial

infrastructure and ubiquitous

the telco-led mobile money model

services provider, and more.

mobile devices. It is estimated

in select markets. Generally,

Distribution costs in the banking

that adult ownership of financial

non-bank financial services

industry, including building

services accounts in Africa has

have significantly boosted adult

branches, connecting them to a

increased from 38% to 74%

ownership of financial services

data network, and paying staff

in the last decade, and mobile

accounts in many African countries.

salaries, are prohibitively high. It is

money has played a key role in this advancement, with Africa accounting for two-thirds of all the value of mobile money transactions globally in 2022. Without a doubt, the digitisation of financial services and distribution via mobile and agency banking channels has made them more accessible, but what impact has this had on the lives of Africans?

The effect of widespread access to digital financial services has been significant on the lives of Africans.

Sending money to a family member elsewhere in the country can now be achieved without leaving home. Consumers no longer need to make a journey to the office of a utility company or service provider (e.g., cable TV) to make a bill payment. They also do not

therefore not feasible to establish a bank branch in every community; however, agency banking, created by mobile money operators who already had a massive telco distribution network of agents selling airtime, makes it possible to have physical locations for financial services in the communities where customers live and work. This, along with the ubiquity of mobile devices, has contributed to the huge

Traditionally, banking and other

need to travel to a bank to check

formal financial services were

their account balance or to access

reserved for only big businesses

their funds. The savings in time and

Mobile money is only the entry

and well-heeled individuals

improvements in productivity for

point to accessing financial services

in African countries. The unit

African consumers have been quite

and is largely limited to a store of

economics of establishing and

significant.

value wallet, which allows for funds

running a branch network along with the requirements for opening and operating an account ensured that banking services only reached a minority of the population. As the 20th century came to an end, Africa witnessed a mobile phone revolution. GSM licences were granted by several nations, and within a decade, having access to a phone line was no longer a luxury on the continent. The decision by telcos to include mobile money wallets in their offering could not have come at a better time.

Popularised by Kenyan Safaricom’s

For individuals seeking to transact across borders, the possibilities have also expanded. Remittances into African countries are a major source of foreign currency earnings. In the past, a student in Dakar, Senegal, receiving money from his older brother based in Paris, France, would need to wait a couple of days for the funds to arrive, and he had to go to a bank branch or remittance agent to cash out. Today, he can receive the funds instantly into his account or digital

success of mobile money in Africa.

transfers within the operator’s mobile network. Partnerships with other ecosystem players can radically improve the offering, adding credit, insurance, and other valuable services to the bouquet.

For example, in 2019, Ecobank partnered with MTN Mobile Money in Ghana to include its microlending product, XpressLoan, on the mobile money menu, and within the first 6 months, loans worth $150 million were issued to over 1 million unique users.

wallet and pay for books or food directly from there.

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Uplifting African communities with digital financial services There are several studies that

transfer program in which eligible

access to world-class financial

show the benefits of mobile

citizens received funds from the

services, and several have launched

money in Africa, such as in

government into digital wallets.

sleek applications and published

northern Uganda, where access

This cash transfer helped the poor

them on Google Play or the App

to these digital financial services

with their immediate needs but also

Store. These solutions largely

increased food security by 45%,

may become the basis of programs

target the few citizens who are

and self-employment increased

to identify the most vulnerable.

already mostly multi-banked,

for individuals who lived far

Indeed, the increased adoption of

with verifiable or high-income

away from a branch. During the

digital financial services across

levels. They may do little to put a

COVID-19 pandemic, several

the continent could lead to the

dent in financial inclusion, as only

African governments leaned on the

accelerated achievement of several

43% of Africans have access to

networks built by mobile money

United Nations Sustainable

the internet, and even fewer can

operators to deliver palliatives

Development Goals (SDGs).

consistently pay for data. There

to their most vulnerable citizens.

For example, as the economic effects of the lockdown started to bite, the government of Togo launched Novissi, which means solidarity in the local dialect, Ewe. The initiative was a money

In the last few years, there has been growing interest in venture capital investments in African Fintech, fueling the growth of digital wallets and payment applications. Many point to the 350 million unbanked Africans, waiting to be granted

are, however, some exceptions, for example, Wave, a Senegalesebased fintech firm, whose service is based on an app but also provides a printed QR code to customers who do not have a smartphone so they can transact at agent locations.

Enterprise Evolution Businesses have not been left out

capture the merchant payments

previously overwhelmed by these

of the gains from digitisation. A

opportunity in Africa.

tasks.

The rise in mobile money and real-

Digital banking and other financial

time account-to-account transfers

services in Africa have significant

is changing the business collections

implications for trade between

landscape. Businesses now expect

nations, a key to improving

instant settlement as they adopt

productivity and growing the

virtual accounts, Quick Response

respective economies on the

(QR) payments, Near Field

continent. A boutique hotel in

Communication (NFC) payments,

Accra, Ghana, receiving a group of

albeit a nascent solution in Africa,

international guests from Spain,

and more. Collection solutions

would have struggled to process

include an array of value-added

the payments involved, facing high

services such as reconciliation,

charges, or having to accept cash

inventory management, loyalty,

after failed attempts to settle the

and others. This has simplified the

bill. Today, while cross-border

lives of many small and medium-

payments can still be challenging in

sized businesses who were

Africa, there are several solutions

decade ago, a bakery owner in Kigali seeking to accept digital payments could not do so easily or inexpensively. Today, thanks to simple lines of code provided by Fintech firms like Flutterwave and Paystack, they can easily receive online payment for orders. Even in-store payments have been enhanced by digitisation, with companies like Yoco in South Africa simplifying the process of ordering POS terminals and providing other services that empower businesses.

With all this progress made, there is still a significant opportunity for the organisations that are able to

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Osahon Akpata Group Head, Consumer Payments Ecobank Transnational Incorporated

emerging. The ratification of the African Continental Free Trade Area (AfCFTA) and the establishment of the Pan African Payment and Settlement System (PAPSS) is expected to ease intra-Africa crossborder payments and expand trade between the continent’s nations.

PAPSS will facilitate cross-currency settlement, which would mean that a garment manufacturer in Abidjan, Côte d’Ivoire, will be able to receive instant payment in West African CFA Francs from an apparel retail chain in Zambia who paid in

Kwachas without going through a

meant that these businesses may

third currency.

now access credit and buy now pay

It is estimated that the informal economy in Africa represents 55% of the Gross Domestic Product (GDP) and employs nearly 83% of adults. These businesses are in agriculture, retail trade, transportation, and several other

later (BNPL). A cosmetics trader in Kano, Nigeria, can order products from her wholesaler on credit and make payment when she has sold products. This will enable her to expand her business further and serve her community better.

segments and are a critical part

Larger corporations in the formal

of our economies. Technology

economy are also adapting to the

platforms have recognised the size

digital era. They use technology

and breadth of these businesses and

to optimise supply chains, track

are providing solutions to digitise

sales, and stay ahead of market

their businesses and connect them

trends. Digital banking is not just

with suppliers and offtakers. The

about convenience. It is a catalyst

availability of embedded finance

for innovation and resilience in the

solutions on these platforms has

corporate world.

Conclusion The digital banking revolution in Africa has not only rewritten the financial landscape but has also reshaped the very fabric of societies. It has empowered individuals, catalysed enterprise evolution, and contributed to the communal upliftment of diverse communities. Africa’s journey to financial inclusion and prosperity is far from over, but the digital banking revolution has set it on an exciting and promising path toward a brighter future.

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TRANSFORMING LIVES

DIGITAL BANKING’S IMPACT ON FINANCIAL EMPOWERMENT IN AFRICA

T

he African continent,

This revolutionary shift from

also in other African countries such

renowned for its diverse

traditional banking methods to

as Ghana, Zambia, Guinea, South

culture, breathtaking

digital platforms has not only

Africa, Mozambique, Sierra Leone,

scenery, and extensive history, has

expanded access to financial

Kenya, Rwanda, Congo, and Gambia,

long served as an ideal environment

services but has also fostered

which has contributed to financial

for resiliency and resourcefulness.

greater efficiency, transparency,

inclusion. With access to mobile

However, it has faced considerable

and accessibility, ushering in a new

banking, people can now send and

difficulties in the financial services

era of financial empowerment for

receive payments online, avoiding

sector. Africa’s financial landscape

millions of Africans. Here are some

the risks associated with carrying

has been marked by limited

of the landmark contributions of

cash for long distances. This

access to banking services, low

Digital Banking in Africa:

newfound convenience empowers people to save, invest, & secure a

financial literacy, and a lack of

better future.

However, introducing digital

Financial Inclusion: Bridging the Gap

banking has contributed to

Digital banking has helped

reducing these issues, providing

overcome geographic limitations

a beacon of hope for millions. In

because even the most isolated

Digital banking has become a

addition to changing the financial

areas may now obtain financial

potent ally for African businesses.

environment, this wave is also

services. Thanks to the widespread

Today’s startups, micro-businesses,

impacting people’s lives on a

usage of e-wallets and

and SMEs can access effective

personal, professional, and social

mobile banking, people

lending platforms, payment

level.

can now participate in

infrastructure.

CONTRIBUTIONS OF DIGITAL BANKING IN AFRICA Digital banking has brought about transformative changes in Africa’s financial landscape, redefining how people access and manage their finances across the continent.

Digital banking has significantly contributed to financial inclusion, economic growth, and overall development with its innovative technologies and services.

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the financial economy.

For example, Access Bank’s super mobile app, Access More, with over 5,041,831 subscribers, has users in both urban and rural areas, not just in Nigeria but

Business Growth: A Catalyst for Prosperity

systems, and digital marketing

Payday Loan is an instant loan

technology. This financial inclusion

tools. It is common knowledge that

product for customers (both

has positively impacted their lives

funding is one major challenge

salary and non-salary earners).

economically and enhanced the

business owners face. Even those

With Payday Loan, Access Bank’s

community’s overall well-being..

qualified to get a loan are often

customers can borrow money

daunted by the complicated and

at a low-interest rate without

rigorous process of securing

documentation or collateral.

one. One of the ways Access

Quickbucks offers customers

Bank has leveraged the power of

convenience, accessibility,

digital transformation to support

flexibility, and self-service

businesses is via Digital Lending.

features, benefiting business

Digital lending, also known as online lending or e-lending, involves providing financial

owners and positively influencing business growth.

through digital platforms and

Empowering Communities: Socio-economic Progress

technologies. It leverages advanced

Digital banking is about individual

technologies and data analytics,

and business growth and fostering

offering borrowers a convenient

socio-economic progress at the

and efficient way to access funds.

community level. By enabling

services, particularly loans,

Unlike traditional lending, which typically involves physical branches and paper-based processes, digital lending leverages technology and data to streamline the lending process and make it more accessible, efficient, and

access to financial services, digital banking uplifts entire communities.

It is no secret that brick-andmortar banks are primarily found in developed areas. For people living in undeveloped communities, that is an economic setback.

convenient for borrowers. The bank

In Africa, smartphone penetration

curated digital lending products,

has been a significant contributor

such as Quick Bucks, designed to

to digital transformation. Digital

meet our customers’ immediate

banking has changed the game by

financial needs.

allowing people to send and receive

QuickBucks is a Mobile Banking Application for digital loans. It is a platform for all loan products to improve customer’s borrowing experience – for retail loans, credit cards, debit cards, and consumer durable loans. The Quickbucks

money securely via mobile phones regardless of their economic status, location, or proximity to a physical bank. For people without access to a smartphone to download a banking app, the USSD option has helped with fast and effective transactions.

mobile application has four

Access bank USSD option allows

major products: PayDay

airtime buying, funds transfer,

Loans, Salary Advance,

merchant/bill payment, balance

Small Ticket Personal

inquiry, and other services. It’s

Loans, and Device

fast, convenient, secure, and easily

Financing.

accessible. USSD is accessible on even the most basic mobile phones, which makes it an inclusive

THE DRIVERS OF DIGITAL TRANSFORMATION IN AFRICA Mobile Revolution The widespread adoption of mobile technology has been a gamechanger in Africa. With mobile phones becoming increasingly affordable and accessible, they have become powerful tools for communication, commerce, and access to information. Access More, for example, is a banking app that has served its purpose as a critical driver for digital transformation within the financial sector. By offering customers convenient access to a wide range of financial services through their smartphones or tablets, the app has enhanced user experiences, increased efficiency, and reduced reliance on physical branches.

Youthful Population Africa boasts one of the world’s youngest populations. According to the United Nations, Africa has the youngest population in the world, with 70% of sub-Saharan Africa under 30. This demographic dividend is driving digital transformation. The tech-savvy youth are consumers and creators of digital solutions, fostering a culture of innovation across the continent. Many digital solutions are also targeted to this population.

The personalisation on the Access More App speaks to the youthful population. The personalised interface and services have captivated young people by offering tailored experiences and financial insights. This customisation 25

allows young users to align the app with their preferences and style, creating a sense of ownership.

Fintech Innovation African fintech startups are at the forefront of financial innovation.

They are creating digital payment systems, lending platforms, and insurance solutions tailored to African consumers’ and businesses’ unique needs and challenges.

Access Bank has recognised the importance of fintech in staying competitive, meeting evolving customer demands, and driving innovation within the financial sector. In response, the bank has established a dedicated fintech arm called Africa Fintech Foundry to harness the power of technology and propel its financial services into the future. The bank has also built fintech companies from scratch, such as Hydrogen, a digital payment and switching service solution, and Oxygen, a digital lending innovation.

ACCESS BANK: A DRIVING FORCE OF DIGITAL TRANSFORMATION In Africa, the financial industry, including banks and financial institutions, are major drivers of digital transformation. These industry leaders recognise the potential of technology to enhance financial services, improve customer experiences, and expand financial inclusion. Access Bank has developed and continually upgraded its digital banking platforms, including mobile apps and online banking portals.

These platforms offer customers convenient ways to access their accounts, make transactions, pay bills, and manage their finances 26

from the comfort of their homes or onthe-go.

Access More, the bank’s mobile banking app, provides many services, including fund transfers, bill payments, and airtime top-ups. The app also has a lifestyle section where users can book flights, events, or movie tickets.

Users can also buy insurance and stock options. Additionally, Access Bank has expanded its agency banking network, enabling individuals and businesses in underserved areas to access essential banking services through authorised agents. This organisation has integrated AI-powered chatbots into its customer service, enabling 24/7 assistance and quick resolution of common queries, thus improving customer satisfaction.

CONCLUSION Access Bank has emerged as a prominent driver of change in this digital transformation landscape in Africa. Recognising the importance of financial inclusion, the bank has launched initiatives to bring unbanked and underbanked populations into the formal financial system. From a super app to innovations around agency banking, blockchain, robotic process automation, artificial intelligence, and other digital technologies, Access Bank is instrumental in promoting digital banking and financial inclusion.

By leveraging technology and innovation, Access Bank contributes to African communities’ economic growth and prosperity, exemplifying the potential for positive change in the digital age. As Africa continues to embrace digital transformation, Access Bank stands as a beacon of progress and a catalyst for economic development on the continent. The bank prioritises staying updated with emerging digital trends and will continue to do so to fulfil its vision of being the world’s most respected African Bank.

DANIEL AWE Daniel Awe is currently the Head of Africa FinTech Foundry (AFF), an establishment with an overall objective to scout, search and identify industry agnostic start-ups that are solving problems. In addition to supporting start-ups, Daniel leads the team’s venture creation strategy focused on developing digitally-led sustainable businesses.

Daniel is an experienced Payment Solution Architect that previously led the Channels Solution Delivery Group in Access Bank Plc before his appointment as Head of Africa FinTech Foundry. Daniel spent the last 17 years innovating and creating cutting edge e-Payment platforms in the financial sector.

Daniel is equipped with a wealth of experience around Leadership, Management, Strategy, CX Transformation, Design Thinking, Solution Architecture, Enterprise Capability, Agile Project Management, and a unique forte to identify and nurture innovative opportunities.

Daniel graduated with a B.Sc. Honours in Electronics with Computer Engineering from the Lagos State University and Advanced Leadership and Management program from the prestigious IMD. He is also an alumnus of the prestigious Lagos Business School and has won several awards from prestigious awarding bodies.

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EMERGING ROLE & POSITIONING OF FINTECH IN DRIVING THE INCLUSIVITY OF

INSTANT PAYMENT SYSTEMS (IPS) IN AFRICA

A

Jacqueline Jumah Director, Advocacy & Capacity Development AfricaNenda

28

frica has made significant progress in digital financial services, propelled by the widespread mobile money rails and fintech innovations. These developments are contributing to improving financial inclusion, facilitating economic growth, and empowering individuals and businesses with greater access to financial services. In this

paper, we will adapt the fintech definition by the WorldBank series ‘Fintech and the Future of Finance’1 . Here, fintech refers to advances in technology that have the potential to transform the provision of financial services, spurring the development of new business models, applications, processes, products, and services.

Fintech therefore constitutes; firms

specialised in technology-enabled financial innovation, big tech firms involving large technology companies whose primary activity is platform-based digital services, and incumbent financial service provider institutions transitioning to platform models. The ongoing collaboration between fintech entities and regulatory authorities is expected to further drive the expansion and impact of digital finance in Africa.

Despite the advancement of DFS, payment scheme decisions are dominated by central banks and commercial banks and in many countries, scheme governance largely rests with these two entities types only, thereby excluding non-bank participants e.g. fintech entities, and therefore the scheme playing field is largely not yet open and level.2 Across the continent, banks and mobile money operators (MMOs) are key IPS participants.

Fintech entities are fewer but with growing participation as direct participants, third-party service providers, or aggregators.

The majority of IPS are not inclusive. While the rise in the number of IPS is a substantial achievement, the analysis of the IPS landscape shows significant constraints to inclusivity. Not all IPS offer access to most in-demand channels; most do not yet enable cross-domain interoperability for the greatest end-user choice, and the majority of them do not allow non-banks (fintech) to participate in decisions. Many of them also only offer limited use cases, and only a handful have integrated B2P, P2G, and G2P payments. These limitations are challenging the ability of IPS to scale in Africa.

HOW MIGHT FINTECH ENABLE THE INCLUSIVITY OF IPS IN AFRICA? Fintech is revolutionising the financial services space by driving innovation and development in several areas including payments, marketplace lending and alternative underwriting platforms, insurance, capital markets, and wealth management, among others.

As investment in fintech initiatives targeting payments continues to boom,3 there are several ways in which fintech could be leveraged to drive the inclusivity of instant payment systems in Africa. These are:

Augmenting the capabilities of regulating authorities, and influencing regulatory reforms.

As the market continues to grow driven by fintech innovation, regulators and financial services supervisors continue to face challenges in effecting optimal regulation and supervision, considering the rapidly changing and increasingly digital remit, as well as emerging financial

globalisation and cross-border solutions.4 Increasingly, regulators are taking up technology solutions - regtech and suptech to enhance their capabilities and commitment to meet the challenges posed by increased digitisation and expansion of their mandates.

Increased use of fintech solutions could improve oversight into payments by enhancing several aspects, including regulatory reporting, risk management, identity management and control transaction monitoring and compliance, among others.

Examples of the emerging use of regtech and suptech in Africa include data-driven financial system stability in Rwanda and Nigeria. The National Bank of Rwanda uses an electronic data warehouse to automate and streamline reporting processes for the supervision of more than 600 financial institutions.5 Data is automatically pulled every 24 hours or even every 15 minutes in the case of mobile money and money-transfer operators. The Central Bank of Nigeria (CBN), the Nigeria Inter-Bank Settlement System Plc (NIBSS), partnered with the BFA team to redesign their data infrastructure to guide supervision and policy-making more effectively and generate richer open datasets for public and private use.6

1

Fintech and the Future of Finance

2

SIIPS in Africa 2023 report, AfricaNenda

3

Fintech Investment Pours into Africa, KPMG 2022

4 Financial Authorities in the Era of Data Abundance RegTech for Regulators and SupTech Solutions 5

Leveraging ‘suptech’ for financial inclusion in Rwanda 29

Propelling infrastructure development to enhance IPS functionality.

Common payment system barriers include technological inefficiencies, costly delays, vulnerabilities to fraud and cybercrime, and compliance challenges, among other issues.

Standards are therefore necessary to unify how these systems ‘speak with each other’, present and interpret data and information and process payment transactions, to minimise the risks associated with the key challenges. Fintech is providing the necessary direction in implementing standards for infrastructure and security controls for instant payment systems.

Technological advancements could further support the enhancement of the baseline architecture, the technical framework, and a set of standard messaging protocols to facilitate the sending of enhanced data in a richer, more structured format, that all together form the backbone of instant payment systems.7

Enhancing domestic and regional interoperability.

Full interoperability of retail payment systems is necessary to improve efficiencies in payment processing, improve competition and innovation, expand the availability of financial services access points and improve transparency and regulatory oversight. However, this is yet to be achieved in several markets and regions in Africa.8 This is because of the complexities and moot nature of the processes involved in forging the three key interoperability elements,9 i.e. a clear and fair payment system governance model to deliver

coopetition among payment system participants, robust incentives to encourage participation by all participants and safe and reliable operational models including the technology infrastructure for efficient integration. At both the domestic/country and regional levels, many of these payment systems operate as closed-loop systems with slow progress in interoperability through bilateral agreements, multilateral agreements or through third-party solutions. There is a growing opportunity for fintech to standardise how payment systems connect and promote the enforcement of common technical standards, data architecture and terminology at the scheme levels.

This is through fintech entities playing the role of intermediaries along the IPS value chains by offering optimal Application Programming Interfaces (API) solutions and or playing the role of API aggregators. Since the ecosystem of API deployments is not yet mature there is a need for improvement in building more user-centric APIs, strengthening FSP middleware as an on-ramp to APIs, enhancing the capacity of technical teams especially in bank FSPs and staying abreast of perceived regulatory risks.

Regtech for Regulators Accelerator: Payments and Transactions “Data Stack” in Nigeria

6

7 World Bank Fast Payments Toolkit, Scheme Rules In Fast Payments Focus Note, 2022

SIIPS in Africa 2023 report, AfricaNenda

8

9 Interoperability in Digital Financial Services, CGAP, 2021

Fintech and the Digital Transformation of Financial Services: Implications for Market Structure and Public Policy, BIS, 2021

10

11

30

The Mobile Economy 2023, GSMA

Alleviating cost constraints as well as frictions related to scaling instant payment systems and reducing time to market.

Fintech is enabling reduced costs and facilitating economies of scale through enhanced connectivity and computing power.10 These have reduced the costs of data and information transfers as well as processes. Enhanced connectivity and scalable infrastructure for data storage all enable the development of cloud-based services which are cheaper options than servers. As technology advancements increase data and information exchange and reduce transaction costs, the production of financial services continues to be disaggregated introducing FSPs offering unbundled financial services, which promote product, service and channel choices to end users. Non-bank FSPs are increasingly gaining exceptional competitive advantage by applying data analytics to optimise their operations. Core operations such as account opening, product innovation, risk assessment, etc. are constantly being reinvented and the the scale and pace of these changes often lead to new business models, which attract low-tier licensing requirements e.g. offering-specific licenses like payment-related licenses, and easier as well as reduced time to market.

Improving consumer redress mechanisms.

Africa is among the fastest-growing smartphone adoption markets in the world, due to increased affordability from falling average selling smartphone prices, and because most new phone users rely on devices for multiple activities beyond traditional voice calls and SMS. It is against this backdrop that FSPs are introducing the use of chatbots to enhance financial services products and service delivery.12 Increasingly, FSPs are leveraging artificial intelligence (AI) to redefine chatbots to engage and delight customers with human-like interactions and enhanced personalised experiences.

Examples of these deployments in Africa include; Proto AICX by the Bank of Ghana,13 which is an automated consumer protection solution that collects and analyses complaints across multiple FSPs and channels; Kudi AI in Nigeria,14 which allows users to conduct funds transfers, track account details, buy airtime, and pay recurrent utility bills e.g. DSTV payments and the Pesakit Smart Agent App by an FSP in Kenya,15 which has an AIbased chatbot to improve liquidity management for mobile money agents through responding to agent queries about a variety of liquidity

Delivery of more and enhanced digital payments use cases.

Fintech is expanding the use cases for digital financial services by supporting innovation across various sectors, leveraging emerging technologies, and increasingly addressing the specific needs of households and businesses. Through increased accessibility, automation, and customisation, fintech solutions are transforming the way financial services are delivered, making them more inclusive, efficient, and tailored to user requirements.

Here are some key ways fintech is driving these additional use cases: Enhancing financial health through improving personal finance and budgeting, wealth management, digital lending and crowd-funding - This is through allowing individuals and small businesses to invest low-value funds in diversified portfolios, empower users through intuitive tools such as apps and robo-advisors, monitor investments and goals, expense tracking, customised financial insights, provide alternative capital leveraging enhanced data analytics, among others.

consumer recourse mechanisms

Improving the gig economy and providing rails for e-commerce - Fintech caters to the needs of the growing gig economy workforce by providing specialised financial services. Fintech offers features like income tracking, tax management, instant payments, and financial tools tailored to the unique requirements of gig economy participants and

through chatbots, in addition to other

accelerating e-commerce

management issues, as well as carrying out predictive analysis tasks for mobile money float management.

One of the mature IPS inclusivity level requirements is transparent and efficient consumer mechanisms. The above chatbot deployments present opportunities for IPS to leverage fintech to make provisions for and enforce transparent and efficient

consumer protection structures.

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Promoting cross-border payments - Fintech is addressing the challenges of costly and time-consuming cross-border digital payments.

Leveraging digital payment systems and fintech enables faster, more affordable, and transparent international funds transfers, promoting the resilience of households and businesses Promoting open finance - Fintech is promoting the concept of open finance, which allows authorised thirdparty providers to access FSP financial data securely with user consent. This opens the door to diverse products and services that can leverage financial transaction data to provide personalised recommendations, financial insights, and customised solutions Fintech can support Government-to-Person (G2P) digital payment use cases by providing innovative technology solutions that enhance the efficiency, transparency, and accessibility of government payments, improve choices for beneficiaries in handling funds, and benefits, as well as to ensure a seamless and inclusive experience for individuals.

The above ways in which fintech is

driving additional digital finance use cases if optimised, could support the integration of the full range of payment use cases in addition to person-tp person (P2P) and person-to-business (P2B) use cases, which are currently predominant use cases supported

by IPS in Africa.16 This is necessary as it could create a holistic digital payment ecosystem that enables the circulation of digital liquidity while addressing different payment points in Africa

LOOKING INTO THE FUTURE It is important to catalyse the growth of fintech, to move Africa’s instant payment systems into coming inclusive instant payment systems. Some considerations are at play: Firstly, regulators serve as enablers of fintech innovation and development in payments by providing the necessary regulatory framework e.g. risk-proportionate regulation, fostering collaboration, and ensuring consumer protection.

Their active involvement is crucial to maintaining a balance between innovation and regulatory compliance in the financial services industry. Through the adoption of fintech, they may enhance the regulation and supervision responses to market evolution in payments. Regulators have been establishing regulatory sandboxes, innovation hubs and

12

The potential of AI chatbots in driving financial inclusion: Assessing ChatGPT

13

Case study: Financial consumer protection automation in Ghana

14

Kudi AI is putting a human feel to online payments in Nigeria

15

Distribution 2.0: The Future of Mobile Money Agent Distribution Networks, GSMA, 2018

16

SIIPS in Africa 2023 report, AfricaNenda 32

other frameworks, which provide a controlled environment for fintech innovators to test their solutions without the burden of full compliance. This allows for the experimentation of new ideas while ensuring consumer protection and financial stability, and could be optimised to support the full participation of fintech in scheme governance and the journey to IPS inclusivity. Streamlining regulations will also help regulators to keep pace with the rapidly evolving digital financial services landscape.

Lastly, all DFS ecosystem actors could prioritise approaches to reducing fintech tension by exploring a better understanding of developing technology and regulatory concerns to improve the interpretation of the application of regulations to newly developed solutions. Indeed fintech is growing and could introduce certain risks, but there are immense opportunities to scale the instant payment systems and deliver on inclusivity as stated in this write-up. The imperative to promote public and private sector engagements as platforms for collaboration, open dialogue and communication is growing and is useful in promoting awareness of evolving innovation, risks and building trust among stakeholders to promote co-opetition at the payment scheme level or in the marketplaces at large.

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BANKING ON CHANGE: AFRICA’S ROLE IN GLOBAL PARADIGM SHIFT 34

along with its private entities

trend is that while disparity

including banks, must carve out its

between nations might be

vision and decide its position in this

shrinking, the inequality among

evolving landscape.

individuals within these nations

THE AMERICAN ‘EXPERIMENT The world finds itself in what can be dubbed the “American age”, a transition that saw the evolution from feudalism and

is intensifying. The pressing need now is for frameworks that harness these technological marvels in ways that diminish, not exacerbate, this inequality.

AFRICA – FOR THE WORLD

agrarian-based economies to

The endeavours of African nations

industrial capitalism. This shift

embodies a similar spirit of

bolstered international trade and

reinvention. Their aspirations

the establishments enabling it. As

go beyond emulating Western or

Alexis de Tocqueville, the 19th-

Eastern models, aiming instead

century French diplomat observed

for an approach that holds global

about the American democratic

and local relevance, addressing

spirit and emphasis on individual

flaws in the visions for ICT and AI.

prosperity:

Moreover, contemporary focus leans more towards market-

“The greatness of America lies not in being more enlightened than any other nation, but rather in her ability to repair her faults.”

(Source: American Academy of Arts and Sciences, www.amacad.org, accessed 25 October 2023)

Kumaran Selvarajalu​ Payments Division The Banking Association South Africa

and do change. Just as America once stimulated the move to industrial capitalism and expanded

political ideologies. It was my privilege to be a part of the BRICS Business Summit in Johannesburg in 2023, and observed that coalitions like BRICS and AfCFTA, emphasising collaborative growth without stringent political prerequisites, shine as beacons for a new path, in today’s intricate global scenario.

By challenging and reshaping global paradigms, the American ‘experiment’ instigated tremendous growth primarily

Long-entrenched paradigms can

oriented cooperation over rigid

for G7 countries, laying the groundwork for modern globalisation.

Multiple factors place Africa in a unique position to influence global economic paradigms. These include resource richness, a vast young tech-savvy population, immediate practical needs, and importantly, the absence of strict adherence to old economic models.

THE CASE FOR CHANGE TODAY

By learning from past oversights

towards addressing inequality

With the rapid progression in

structure that might not so

more effectively. Banks, with

Internet and Communications

much rival but improve on the

their pivotal roles, are primed to

Technologies (ICT) and Artificial

profound shifts ushered in by the

both drive and benefit from this

Intelligence (AI), the world is at

emergence of the USA as the global

evolution. However, each nation,

a pivotal juncture. The worrying

powerhouse.

global trade, Africa now stands ready to lead a global shift

and leveraging its strengths, Africa can catalyse a global economic

35

BANKS Banks are central to driving this African evolution and are being presented with unparalleled opportunities in this era of change.

With their dual role, they stand uniquely poised to shape the continent’s future. On one hand, they are indispensable vehicles for implementing and stabilising financial regulations in line with national visions and policies,

but recognises each member states sovereignty to form a new,

ensured by rigorous oversight for

improved trade alliance

the stability and integrity of the

It is however observed that

financial system, especially in the crucial function of money creation.

despite different eco-political structures, countries that invest

its digital economy with Vision

in unlocking the potential of

2020. Vision 2050 now builds upon

their human capital, with strong

this, setting clear and bold socio-

national visions and coordinated

economic goals for 2035 and 2050.

efforts to improve domestic

This is evidence of what leadership,

returns, making them pivotal for

capability, are moving ahead.

vision and shared purpose can

long-term economic growth.

More importantly Case in point,

Their inherent ability to store,

Rwanda.

create, and facilitate financial globally, solidifies their position

RWANDA: NATIONAL VISION AND AMBITION

as the bedrock of the worldwide

Rwanda stands as a testament

financial network.

to the transformative power of

On the other, as profit-driven entities, they consistently adapt, innovate, and offer diverse financial products to ensure shareholder

movements, both domestically and

vision and coordination. Once synonymous with a devastating

achieve.

THE RWANDA WE WANT: PROSPERITY AND HIGH QUALITY OF LIFE FOR ALL RWANDANS The overarching goals for the Vision 2050 are:

AFRICA ISN’T A COUNTRY

genocide, it’s now a beacon of

It is essential to remember and

progress. By enhancing digital

Prosperity Rwanda aspires

and physical infrastructures,

to become an upper-middle

Rwanda’s Vision 2020 laid the

income country (UMIC) by

groundwork for its transition

2035, and a highincome country

from an agrarian to a knowledge-

(HIC) by 2050. Specifically, this

based economy, that targets

means realising the following

digital literacy and smart city

key economic targets:

constantly re-emphasise that Africa is not one country. It is a vast continent comprising fiftyfour diverse countries, with unique challenges and opportunities.

Success for the continent depends on the individual visionary ambitions of these nations, respectful of the values, uniqueness and sovereignty of each country.It is plausible the success of BRICS+ may well be that it does not follow the established paradigm of political alignment,

initiatives, able to leverage ICT and AI for rapid socio-

•

Economic Growth and

•

over USD 4,036; and

economic progress. for rapid socio-economic betterment,

•

highlighting areas like digital literacy and smart city solutions.

Rwanda set the foundation for

Source: Rwandan Ministry of Local Government, https://www.minaloc.gov.rw/, Accessed 25 October 2023 36

By 2035: GDP per capita of

By 2050: GDP per capita of over USD 12,476

•

High Quality and Standards of Life for Rwandans •

•

in Kenya in 2015 and since expanded to

standards of living

Uganda, Tanzania and now India, brings

Rwanda will build on the strong progress

together people from both the supply and

made in reducing poverty over the last two

demand sides in an agricultural marketplace

decades, reducing the poverty rate from

to support farming communities.

78% after 1994 to 38% in 2017, with the aim of eliminating poverty altogether •

best price for their produce. Farmers can also access quality farming products like fertilisers

investments in human capital and ensuring universal access to amenities, safety and security

and review farming information such as weather forecasts and pest control advice through the platform, as well as get paid and pay digitally. A digital record of their transactions means they have the validated

Youth, women, men, and elderly people

financial history they need to apply for

will contribute as actors of sustainable

loans to finance and grow their businesses.

development, ensuring that no one is left behind in benefiting from development.

Vision 2050 is informed by the aspiration of Rwandans of leaving to Rwandan children a better world to live in •

buyers, empowering them to negotiate the

all walks of society have increased development, including by growing

•

Farm Pass connects farmers directly with

This will be achieved through ensuring opportunities to contribute to national

•

“Mastercard’s Farm Pass platform, piloted

The aim is to achieve high quality and

And buyers can source their products more efficiently.

(Source: MasterCard, www.mastercard.com, accessed 25 October 2023)

As such, growth and development will follow a sustainable path in terms of use and management of natural resources while building resilience to cope with climate change impacts.

•

FarmPassTM stands as a testament to the power of technology when tailored to national visions and local needs.

Rwandans’ aspiration for high quality of life will be further appreciated through the quality of the environment, both natural and built

CONCLUSION In summation, the intricate dance between stateset objectives and market responses is rife with challenges. Yet, with harmonious synchronisation, there lies a path to combat inequality, harness

RELEVANT PRODUCTS, ALIGNED TO LOCAL NEED

technology, and prioritise human development. In

While state policies lay the groundwork, the

the potential to catalyse transformative change. This

market, especially pivotal players like banks, must

is not simply only an opportunity for advancement

contextualise and deploy technologies aligned with

of human rights and dignity, but the opportunity for

Africa’s evolving needs. A prime example of this

good sustainable profits – for the early entrants.

this journey, banks, given their foundational role in economies, stand at a pivotal crossroads, holding

synergy is MasterCard’s FarmPassTM, designed specifically for the African landscape.

37

FirstBank Empowering Lives Through Financial Inclusion

F

inancial inclusion has been identified by several stakeholders as a key enabler of reducing extreme poverty and improving shared prosperity. The ability for economically active adults to save money, send and receive payments, access credit and insurance services through a suitable financial product, and in a sustainable manner is usually the gateway to poverty reduction and attainment of financial freedom.

38

Indeed, financial inclusion is an enabler for at least seven (7) of the 17 United Nations’ Sustainable Development Goals (SDGs). This further underscores the point that significant mileage can be made in shared global prosperity with a marked improvement in financial inclusion levels. Little wonder there has been sustained global attention and focus on financial inclusion in recent times.

This attention has also started to yield remarkable results. According to Global Findex (2021), the global financial inclusion rate improved from 51% in 2011 to 76% in 2021.

During the same period, SubSaharan Africa’s financial inclusion growth rate (measured by account ownership) outperformed the global growth rate by increasing from just 23% in 2011 to 55% in 2021. Despite this impressive growth, Sub-Saharan Africa still

ranks among the bottom three regions globally in terms of account ownership and usage.

While some progress is being made, Africa has traditionally recorded lower financial inclusion levels compared to other regions of the world for several reasons. First, account ownership (the gateway to financial inclusion) level has been low due to a higher poverty rate on the continent. This has greatly limited the propensity to save and thus, the need to open a formal bank account. Likewise, a lower literacy rate (in comparison to other regions) has obfuscated the importance of financial access in achieving financial freedom.

The continent has also contended with considerable infrastructural gaps that have made financial services either unavailable or rather expensive for most residents.

However, thanks to increasing focus by various governments as well as the activities of development partners and the advent of technology (particularly, Digital Financial Services [DFS]), most of these challenges are being surmounted to improve the financial inclusion rate on the continent.

In 2012, the governments of Kenya, Malawi, Nigeria, Rwanda, South Africa, Tanzania, Uganda & Zambia made national commitments at the G-20 Los Cabos Summit, and since then, these countries have achieved significant milestones in financial inclusion. Also, activities of development agencies, such as the World Bank Group, have been instrumental in providing critical interventions, data, and partnerships necessary to scale the level of financial inclusion on the continent.

It is worthy to note that the increasing adoption of digital technology in the delivery of financial services has had the greatest impact in narrowing the financial exclusion gap on the African continent. Digital Financial Services have proven to be very useful in three distinct ways: Increasing financial access by lowering the cost-toserve and thereby making financial services more affordable.

Enabling players on the continent to customise and simplify financial solutions to meet the specific needs of the under-banked and unbanked population.

Improving access to credit by offering providers creative and innovative credit profiling techniques to better manage the risks inherent in lending to the low-income populace.

In Africa, Digital Financial Services are being employed to deliver financial services along three primary routes: mobile money, agent banking, and digital banking. These delivery routes are uniquely positioned to cater to the needs of the different individual customer segments, taking advantage of advancements in the adjacent mobile telephony sector. Specifically, while both mobile money and agent banking can particularly meet the needs of low-income earners or the unbanked, digital banking (riding on growing internet penetration in

Dr Adesola Adeduntan Chief Executive Officer FirstBank Group

Africa) is more suited to meet the needs of the middle to high-income population. The ease of transition from one delivery route to the other has also greatly benefitted all consumers of financial services in Africa.

In Nigeria, due to the strong interplay between government (or regulatory) policies and the aggressive adoption of digital technologies by both incumbent financial services players as well as fintechs, the Nigerian financial services landscape has witnessed tremendous transformation in recent times. The Central Bank of Nigeria (CBN) launched its National Financial Inclusion Strategy in October 2012 to reduce the financial exclusion rate from 46.3% in 2010 to 20% by 2020. Although the nation missed this target by a 16% margin, Nigeria has witnessed significant developments in scaling critical national infrastructural base as well as improving regulatory maturity levels that will 39

facilitate the attainment of the new 5% financial exclusion rate target by 2024.

As the premier financial institution in Nigeria with a rich and successful history spanning over 129 years, FirstBank remains the leading stakeholder that has partnered with the Nigerian government and people to advance financial inclusion in the country.

With FirstBank’s extensive digital and physical footprint across the length and breadth of Nigeria, no other player comes close in bringing financial services access and opportunities nearer to the Nigerian people, irrespective of their segment, location, and economic status.

their homes and offices. Through the core digital banking platforms, customers can access loans, perform account maintenance activities, meet their lifestyle needs, and carry out several other banking transactions without visiting the branch. The Bank’s Super App (Lit App) is also set to revolutionise the Nigerian financial services space upon full roll-out to the public.

FirstBank has been successful in leveraging innovative technologies to deliver financial services along three main routes – digital banking, mobile wallet, and agent banking.

FirstBank’s USSD (*894#) platform currently has over 15 million subcribers, allowing the not-tootech-savvy customer segment to perform banking transactions at their fingertips by dialling unique strings of codes. The USSD channel is particularly suited to rural and semi-urban dwellers where internet penetration may not be as strong as in urban areas. With this channel, semi-literate rural dwellers can send and receive money, purchase airtime, pay bills, and even access micro-loans to meet urgent personal needs.

FirstBank also offers the mobile wallet product (FirstMonie) where customers’ telephone numbers serve as a wallet account, enabling them to have access to financial services. This product is particularly helpful to customers who might not be able to meet the minimum documentation requirements necessary to open a formal bank account but who possess a mobile telephone number.

The Bank’s core digital banking platforms (FirstMobile and FirstOnline), with over 7 million users, offer customers the opportunity to conduct banking services right from the comfort of

FirstBank’s Agent Banking network is the undisputed largest bank-led network in Nigeria. FirstBank’s Firstmonie agent network operates in 772 of the 774 local government areas in Nigeria, with more than

In line with the mission to “provide the best financial services possible,” FirstBank has always sought innovative ways of extending and deepening financial access and making banking more seamless and convenient for the citizenry. In this regard, FirstBank was the first to introduce Automated Teller Machines (ATMs) into the Nigerian market in 1991 and continues to adopt cuttingedge technologies in delivering financial services.

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215,000 agents. At least 63% of the Bank’s FirstMonie Agents are in either rural areas or semiurban areas where they play crucial roles in bringing financial services closer to the unbanked and underserved communities.

The Firstmonie network has cumulatively processed more than NGN 30.17 trillion and circa 1.36 billion transactions since January 2018. The Firstmonie network offerings include account opening, cash deposit, cash withdrawal, airtime purchase, bill payment, government-revenue collection, transfer and disbursement, mobilemoney (wallet creations, deposits, withdrawals), bank verification number (BVN) enrollment, and other non-bank ecosystem valueadded support services. FirstBank’s Agent Banking network powers economic development in many communities throughout the country, creating more than one million direct jobs. The agents are also empowered to grow their business volumes via a credit facility (Agent Credit), digitally accessed to meet any intra-day cash flow shortages. Agents earn an average of NGN85,000/month in bonus. As a pan-African bank with footprints in seven African markets, Europe, and Asia, FirstBank remains committed to leading the charge in deepening financial inclusion in Africa by providing innovative products that leverage cutting-edge technology to make access to financial services easier and seamless, thereby creating better wealth opportunities and empowering more Africans to attain their full potential.

THE INFLUENCE OF

DIGITAL BANKING IN AFRICA’S ECONOMIC UPTURN The rise of digital banking in Africa’s dynamic economic landscape is not just a technological breakthrough but a transformational force shaping the future of financial dynamism across the continent.

Let’s explore the profound impact of digital banking on individual empowerment, entrepreneurial opportunities, and community development, delving into success stories, innovative solutions, and the collaborative efforts necessary for sustained progress.

DIGITAL BANKING UNLEASHED Digital banking in Africa is not just about transactions; it is a catalyst for positive change.

Information barriers are breaking down as financial technology

opens up unprecedented access to financial services. Take the success story of M-Pesa in Kenya. This mobile money platform has become a global phenomenon, providing millions of people with the tools to conduct financial activities, secure their financial future.

The convenience and accessibility of M-Pesa show how digital banking can bridge the gap for individuals traditionally excluded from the financial system; it can empower.

In South

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Africa, the partnership between Discovery Bank and Mobile Network operator Vodacom has led to the creation of the innovative VodaPay Super App. This app seamlessly integrates banking, shopping, and lifestyle services, offering users a one-stop solution for their financial and daily needs.

Such integrative approaches not only enhance convenience but also showcase the potential for digital banking to become an integral part of individuals’ lives.

ENTREPRENEURIAL OPPORTUNITIES The digital revolution is unlocking a wave of entrepreneurial possibilities throughout Africa.

Start-ups are leveraging the era to offer modern economic solutions.

In Nigeria, Flutterwave, a fintech business enterprise, facilitates seamless payment transactions, empowering agencies to thrive in the digital age. Such tasks not only foster financial growth but also demonstrate the capability for technology to democratise access to financial tools, leveling the playing field for aspiring entrepreneurs.

In Rwanda, the success of Kasha, an e-commerce platform, exemplifies how digital banking can empower female entrepreneurs. Kasha provides a platform for women to access health and personal care products, utilising digital banking to facilitate secure and convenient transactions. This model not only supports women’s economic empowerment but also highlights the role of digital banking in addressing specific societal challenges.

AI’S ROLE IN FINANCIAL TRANSFORMATION: Artificial Intelligence (AI) stands at the forefront of the digital banking revolution, offering unparalleled capabilities to enhance efficiency, security, and personalisation. Banks embracing AI can analyse vast datasets to tailor financial products, making them more accessible and relevant to individual needs. For instance, in Ghana, Absa Bank has implemented AI-driven chatbots that provide personalised financial advice to customers, enhancing financial literacy and accessibility.

Another notable example is the use of AI for fraud detection and prevention by Equity Bank in Kenya. By leveraging AI algorithms to analyse transaction patterns, the bank can swiftly identify and address potential fraudulent activities, ensuring the security of digital transactions. These applications of AI contribute to the ongoing evolution of digital banking, making it not just technologically advanced but also more secure and userfriendly.

INNOVATIVE SOLUTIONS FOR COMMUNITY DEVELOPMENT: Digital banking’s impact extends beyond individuals to communities at large. Equity Group Foundation’s Wings to Fly program in Kenya is a testament to the power of collaborative efforts and innovative solutions. By combining digital banking with educational initiatives, this program provides scholarships and mentorship to economically disadvantaged students, fostering a generation empowered to drive socioeconomic progress.

In Ghana, the partnership between MTN Ghana and a local microfinance institution, Fidelity Bank, has resulted in the establishment of the Mobile Money Agent Assisted Model.

This initiative empowers local entrepreneurs, turning them into Mobile Money Agents who provide financial services to underserved communities. Through this model, digital banking becomes a tool for community development, creating employment opportunities and expanding financial inclusion.

ADDRESSING CHALLENGES: While digital banking offers immense potential, challenges persist. Cybersecurity threats and digital literacy gaps need urgent attention. Collaborative efforts between financial institutions, donor agencies, government, and tech companies are crucial to creating a secure and inclusive digital banking environment.

Initiatives like cybersecurity awareness campaigns and digital literacy programs can empower users to navigate the digital landscape safely.

The Way Forward: Collaboration and Sustainable Progress The future of digital banking lies in collaboration. Financial institutions need to engage actively with fintech innovators, regulators, and communities to create a robust ecosystem. Collaboration can address the challenges and unlock the full potential of digital banking in providing financial empowerment.

Faheem Ali Expert in Digital Transformation, Tech Leader, & Financial Inclusion Faheem has a strong management background in the Inclusive Finance and Banking domain with insightful understanding of the financial & technology sector in various markets in Central Asia, Asia Pacific, Africa, and the USA. He has extensive experience in digital product development, corporate and product marketing strategies formulation, digital transformations, DevOps, cybersecurity, and FinTech/ FinServ operations.

He also delivers workshops, training, consulting, and executive coaching services to support this work, including supporting a culture (change agent) that encourages people to think differently, take actions, and focus on the customer to drive business growth. He is an international speaker and has trained more than 36,000+ delegates across the globe.

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represents a chapter in the everevolving narrative of financial transformation.

Beyond Recognition: A Chronicle of Impact This listing goes beyond mere recognition; it’s a chronicle of impact. These winners have not only embraced change but have been architects of it, steering the industry towards a future that is more inclusive, more innovative, and more attuned to the diverse needs of the African population.

CELEBRATING

EXCELLENCE IN AFRICAN FINTECH

THE DIGITAL BANKER AFRICA AWARDS

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n the pulsating heart of Africa’s fintech revolution, we proudly present the crème de la crème—the winners of the prestigious Digital Banker Africa Awards. As we pen down this introduction, we

are not just listing names; we are immortalising the innovative spirit, resilience, and transformative impact of these trailblazers who have propelled the digital banking landscape to new heights.

A Symphony of Innovation

Trailblazers in Fintech

The Digital Banker Africa Awards stand as a testament to the unwavering commitment of individuals, institutions, and technologies that have reshaped the financial landscape across the continent. This is not just a list; it’s a symphony of innovation, echoing the strides made in digital banking that transcend boundaries and redefine what’s possible.

Excellence

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The winners we honour today are the trailblazers—the visionaries who have navigated challenges, harnessed opportunities, and left an indelible mark on the digital banking and fintech sector in Africa. From groundbreaking technologies to strategic partnerships, each winner

Categories that Matter: Shaping the Future of Finance As we unveil the categories and their respective champions, it becomes evident that the Digital Banker Africa Awards span the spectrum of fintech—from innovative payment solutions and digital banking platforms to financial inclusion initiatives that are making a tangible difference in the lives of individuals and communities.

A Call to Collaboration: Building Tomorrow Together This awards listing is more than a recognition; it’s a call to collaboration. It beckons the winners to share their insights, challenges, and triumphs, inspiring a collective journey towards a future where digital banking is not just a convenience but a vehicle for socioeconomic progress and empowerment.

Join the Celebration: Embracing the Future of Digital Banking in Africa So, dear readers, join us in celebrating the excellence, the ingenuity, and the transformative power of the Digital Banker Africa

Award winners. As we present this listing, we invite you to explore the stories, the innovations, and the individuals that are shaping the future of digital banking in Africa—a future that is vibrant, dynamic, and filled with endless possibilities.

Congratulations to the winners— it’s time to shine a spotlight on your extraordinary achievements!

Angola •

Best Digital Bank: Banco Angolano de Investimentos

•

Best Mobile Banking App: Kamba

Botswana • •

•

Best Digital Bank: First National Bank Botswana Best Mobile Banking App: M-Connect plus (Bank of Baroda) Best Financial Inclusion Services Provider: Absa Bank Botswana

Cameroon •

Best Digital Bank: Citi Bank

•

Best Financial Inclusion Services Provider: Zito Financial

East Africa •

•

Most Innovative RegTech Solution Provider: Global Voice Group Best RegTech Solution Provider: Global Voice Group

Egypt •

Best Digital Bank: Banque Misr

•

Best Mobile Banking App: Mashreq Bank

•

Best Financial Inclusion Services Provider: MNT-Halan

Gambia •

Best Digital Bank: Bloom Bank

•

Best Mobile Banking App:Arab Gambia Islamic Bank

•

Best Financial Inclusion Services Provider

Ghana

Chartered Sierra Leone •

Best Mobile Banking App: UBA Sierra Leone

South Africa •

Best Digital Bank: First National Bank (FNB)

Best Mobile Banking App: UBA Mobile banking App

•

Best Mobile Banking App: Capitec

Best Financial Inclusion Access Bank

•

Best Financial Inclusion Services Provider: Mastercard

•

Best Digital Bank: Access Bank

• •

Kenya

Southern Africa

•

Best Digital Bank:Sidian Bank

•

•

Best Mobile Banking App: I&M Bank

•

Best Financial Inclusion Services Provider: Mastercard

Best RegTech Provider: iiDENTIFii

Tanzania •

Best Digital Bank: NCBA Bank

•

Best Mobile Banking App: Sim Bank Best Financial Inclusion Services Provider: NMB Bank

Morocco •

Best Digital Bank: CFG Bank

•

•

Best Mobile Banking App: CIH Mobile.

Tunisia

•

Best Financial Inclusion Services Provider

•

Best Digital Bank: Biat Bank

•

Best Mobile Banking App: Biat Bank Best Financial Inclusion Services Provider: Arab Tunisian Bank

Mozambique •

Best Digital Bank: Millennium Bim

•

•

Best Mobile Banking App: Vai Daki

Uganda

Nigeria

•

Best Digital Bank: Standard Chartered Uganda

•

Best Mobile Banking App: HFB Mobile Banking App

•

Best Digital Bank: Sparkle Bank

•

Most Innovative Digital Bank: Access Bank

•

Best Mobile Banking App: Access Bank

•

•

Best Financial Inclusion Services Provider: First Bank of Nigeria

•

Best Digital Bank: Standard Chartered Zambia

•

Best Mobile Banking App: ZANACO Mobile Banking

•

Best Financial Inclusion Services Provider

North Africa •

Best RegTech Provider: Jumio

Seychelles •

Best Digital Bank: Absa Bank Seychelles

•

Best Mobile Banking App: JuiceByMCB Seychelles

Sierra Leone •

West Africa Best Paytech Provider: VerifyMe

Zambia

Zimbabwe •

Best Digital Bank: Standard Chartered Zimbabwe

•

Best Mobile Banking App: Stanbic Bank

Best Digital Bank: Standard 45

PIONEERING

PROGRESS:

UNLEASHING UNIVERSAL SOLUTIONS IN AFRICA’S FINANCIAL EVOLUTION 46

The departure from traditional global payment systems, witnessed notably in the BRICS bloc, is catalysing a shift towards decentralised solutions uniquely tailored to Africa’s diverse financial landscape.

Breaking Down Borders: Decentralisation in Action Universal Payment Systems, with their foundation in decentralisation, are breaking down the barriers that have historically hindered financial inclusion across the continent.

Utilising distributed ledger technology, UPS provides a secure, transparent, and efficient platform for financial transactions, ensuring that even remote and underserved communities can participate in the digital financial ecosystem.

I

n the dynamic tapestry of Africa’s digital banking and fintech landscape, a

notable trend is quietly but powerfully making its mark—the transformative rise of Universal Payment Systems (UPS). This paradigm shift, gaining momentum alongside the BRICS countries’ departure from SWIFT, is not only reshaping the global fintech terrain but is proving to be a key player in Africa’s journey towards financial empowerment and inclusion.

Africa’s Fintech

Beyond Geopolitics: A Technological Revolution While the departure of BRICS nations from SWIFT has geopolitical underpinnings, the adoption of Universal Payment Systems in Africa transcends politics. It is a response to the growing demand for financial services that are swift, secure, and accessible. The African fintech renaissance is harnessing the potential of UPS to overcome traditional banking challenges, creating a more inclusive and technologically advanced financial landscape.

Renaissance

Africa’s Quiet Revolution:

As Africa strides confidently into the digital future, the impact of Universal Payment Systems is becoming increasingly evident.

Financial Inclusion at its Core The growth of Universal Payment Systems may be subtle, but its

impact on Africa’s financial inclusion efforts is resonating loudly. From rural villages to bustling urban centres, UPS is enabling cross-border transactions with reduced friction, fostering economic growth, and empowering individuals and businesses to participate fully in the digital economy.

Collaboration for Progress: Bridging the Gap Between Tradition and Innovation The rise of Universal Payment Systems in Africa is not a disruption to traditional financial institutions but an opportunity for collaboration. By combining the strengths of established financial expertise with cutting-edge technology, Africa is poised for a future where financial services are not only efficient but also accessible to all.

Conclusion: Shaping a Future of Financial Autonomy As Africa embraces the transformative rise of Universal Payment Systems amid the broader trend of deglobalisation, it is pivotal to recognise the unique role of this quiet revolution in fostering financial autonomy. Beyond geopolitical shifts, the adoption of UPS in Africa is a beacon of hope, laying the groundwork for a more inclusive, resilient, and technologically advanced financial landscape—a landscape where the power of decentralised systems is driving positive change and empowering individuals and communities across the continent.

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Navigating the

AI Frontier

Lessons from OpenAI’s Leadership Struggle

I

n the ever-evolving landscape of artificial intelligence (AI), the recent leadership turmoil at OpenAI has brought to light a profound schism among AI pioneers. The clash revolves around divergent views on AI’s trajectory—one camp advocating for unbridled acceleration, and the other sounding alarm bells about potential risks. While the debates within OpenAI may not directly parallel the intricacies of the banking sector, the discord serves as a timely reminder for the financial industry to reflect on the potential dangers of AI and reinforce best practices.

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Unveiling the Struggle: Boomers vs. Doomers The dichotomy within OpenAI is often framed as a clash between the “boomers” and the “doomers.”

The boomers champion unabated AI development, foreseeing innovation flourishing without constraints. On the flip side, the doomers express deep-seated concerns about the societal repercussions of AI, advocating for careful management or even constraints on its growth.

The return of Sam Altman, associated with the boomer

ideology, to the helm of OpenAI after the November shake-up signifies a victory for those favouring unrestricted AI development. However, the rift remains, and the incident prompts a broader industry dialogue on the trajectory of AI adoption.

AI in Banking: Navigating Potential Pitfalls While the AI applications in banking may not echo the doomer fears of existential threats, the industry must remain vigilant.

The rapid integration of AI and machine learning into banking

should leverage this moment to engage in a nuanced discussion about responsible AI use, ethical considerations, and the potential societal impacts.

Beyond Existential Threats: Practical Considerations for AI in Banking

processes brings excitement, efficiency, and innovation, but it also requires a thoughtful reflection on the potential risks involved.

As the industry hurtles towards a future where AI capabilities expand rapidly, the OpenAI incident serves as a pertinent reality check. The banking sector can draw essential lessons from this debate, reevaluating its approach to AI adoption and ensuring that best practices are not sacrificed in the pursuit of technological advancement.

Sam Altman’s Return: A Catalyst for Debate Sam Altman’s return to OpenAI’s leadership may signal a victory for the proponents of unbridled AI development, but it should also serve as a catalyst for thoughtful reflection. The banking industry, as a key player in AI adoption,

While the doomer rhetoric may paint AI as an existential threat, practical considerations for the banking sector centre around responsible implementation. This involves robust frameworks for data governance, transparent AI algorithms, and ongoing collaboration between industry stakeholders and regulators. The OpenAI incident emphasises the importance of balancing innovation with responsible practices to navigate the complexities of AI integration successfully.

A Call for Industry Reflection In conclusion, the OpenAI leadership struggle has ignited a crucial debate about the future of AI. For the banking industry, it serves as a clarion call for reflection. As AI continues to reshape financial processes, the industry must prioritise ethical considerations, risk management, and collaborative frameworks. The OpenAI incident invites the banking sector to approach AI with a discerning eye, ensuring that the path to innovation aligns harmoniously with responsible and sustainable practices.

Industry-Wide Collaboration The OpenAI rift has not only been a clash of ideologies but a call for industry-wide collaboration.

Banking institutions, regulators, and AI developers should engage in open dialogue to establish standardised ethical frameworks. A collaborative approach ensures that the benefits of AI are realised while mitigating potential risks, fostering an environment where innovation aligns seamlessly with ethical considerations.

From Debate to Action: Implementing Best Practices The debate spurred by OpenAI is a catalyst for the banking sector to transition from discourse to action. Implementing best practices involves staying abreast of evolving AI technologies, understanding their implications, and continually reassessing ethical guidelines.

By doing so, the industry can proactively address challenges and create an environment where AI enhances financial processes responsibly.

Educating Stakeholders: A Shared Responsibility Beyond internal considerations, the banking sector has a shared responsibility to educate stakeholders—both internal and external—about the ethical dimensions of AI. By fostering awareness and understanding, the industry can create a knowledgeable ecosystem that appreciates the potential and limitations of AI, fostering a sense of collective responsibility.

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SECURING TOMORROW

NAVIGATING THE CYBERSECURITY CHALLENGE IN AFRICA’S SME DIGITISATION REVOLUTION 50

A Threat to Progress The digitisation of operations is a cornerstone for SMEs seeking to thrive in the ever-evolving fintech landscape. However, the CIPE research study, which engaged with 1,280 Micro, Small, and Mediumsized Enterprises (MSMEs) across Africa, paints a vivid picture of the hurdles faced in this digitisation journey. At the forefront of these challenges is cybersecurity, looming large as the paramount issue impeding SMEs’ seamless transition into the digital era.

Unveiling the CIPE Research Insights

I

n the bustling landscape of Africa’s digital banking and fintech revolution, where innovation is the heartbeat of progress, Small and Mediumsized Enterprises (SMEs) emerge as key players in the economic narrative. However, as these enterprises embark on the transformative journey of digitisation, a formidable challenge arises—cybersecurity.

Recent research conducted by the Centre for International Private Enterprise (CIPE) not only underscores the gravity of this challenge but also positions it as the foremost obstacle hindering SMEs in Africa from fully realising the potential of their digital operations.

Delving into the CIPE research study unveils a comprehensive understanding of the multifaceted challenges that SMEs grapple with.

Cybersecurity emerges not just as a technical concern but as a pivotal factor that can make or break the digitisation aspirations of these enterprises.

The vulnerabilities exposed in the study underscore the urgent need for strategic interventions to fortify Africa’s SMEs against cyber threats.

Beyond Numbers: The Human Element While the CIPE research quantifies the challenge, it also sheds light on the human element within these SMEs. The individuals steering the digitisation efforts are acutely aware of the cybersecurity threat, often navigating the delicate balance between innovation and safeguarding sensitive digital assets. The human factor becomes a crucial component in developing

robust cybersecurity frameworks tailored to the unique needs of African SMEs.

Collaborative Solutions for Cyber Resilience As the fintech frontier in Africa continues to evolve, addressing the cybersecurity challenge becomes a collective responsibility.

Collaborative efforts between governmental bodies, industry stakeholders, and SMEs themselves are pivotal in creating a resilient ecosystem that fosters secure digital operations. Initiatives aimed at cybersecurity education, resource mobilisation, and the development of user-friendly tools can empower SMEs to navigate the digital landscape with confidence.

Shaping a Secure Digital Future In conclusion, the cybersecurity challenge faced by Africa’s SMEs is not a roadblock but a call to action.

It prompts a collective effort to fortify the foundations of digital banking and fintech, ensuring that SMEs can fully harness the benefits of digitisation without compromising security. As we navigate the intricacies of this challenge, let it be a catalyst for innovation, collaboration, and the development of a secure digital future that propels Africa’s SMEs towards unparalleled success in the digital era.

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Digital

FinTech Odyssey Navigating E-Commerce Challenges and Innovations in Africa

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T

he surge in digital payments and embedded finance has sparked a transformative

wave across the African e-commerce landscape. From fashion and cosmetics to streaming services, accommodation, and transportation, the continent is witnessing an unprecedented boom in online trade. As the demand for

Infrastructure Limitations: In some regions, infrastructure limitations, including access to the internet and reliable electricity, pose barriers to the widespread adoption of e-commerce. Payment providers must develop solutions that can function effectively in environments with varying levels of technological infrastructure.

seamless, secure, and contactless payment systems grows, payment providers are grappling with unique challenges specific to the African context. In this article, we explore the distinct hurdles faced by the e-commerce sector in Africa and how payment technology is evolving to meet these challenges head-on.

Challenges in E-Commerce Payments in Africa Financial Inclusion Africa is diverse, and a significant portion of the population remains unbanked. Payment providers need to address the challenge of extending digital payment solutions to remote and underserved areas, fostering financial inclusion across the continent.

Currency Volatility and CrossBorder Transactions Africa boasts a myriad of currencies, each with its own set of challenges. Payment technology must navigate currency volatility and streamline crossborder transactions to facilitate international trade within the continent.

Cultural and Linguistic Diversity Africa is a continent rich in cultural and linguistic diversity. Payment providers need to create interfaces that resonate with the local population, respecting linguistic nuances and cultural preferences to encourage broader adoption.

Evolution of payment technology in Africa

Biometric Identification for Financial Inclusion: To overcome traditional identification challenges, biometric authentication is gaining prominence. By utilising fingerprint and facial recognition technology, payment providers are creating secure and inclusive solutions that transcend the limitations of traditional identification methods.

Partnerships and Collaborations Collaborations between payment providers, financial institutions, and e-commerce platforms are fostering a collaborative ecosystem.

These partnerships aim to address challenges collectively, leveraging each party’s strengths to create a more robust and inclusive digital financial landscape.

Mobile Money Revolution

To summarise:

Africa has experienced a groundbreaking shift with the rise of mobile money services.

Leveraging the ubiquity of mobile phones, payment providers are pioneering solutions that allow users to make transactions, pay bills, and access financial services through their mobile devices.

As Africa propels itself into the digital financial frontier, the challenges faced by the e-commerce sector are met with innovative solutions driven by payment technology. From mobile money revolutions to tailored digital wallets and biometric identification, the industry is evolving to meet the unique demands of the African market. The collaborative efforts of payment providers, financial institutions, and e-commerce platforms are laying the foundation for a future where digital financial inclusion is a reality, empowering individuals and businesses across the continent.

Digital Wallets Tailored to Local Markets Recognising the diverse needs of the African market, payment providers are developing digital wallets tailored to specific regions.

These wallets integrate seamlessly with local payment methods and cater to the unique requirements of consumers and merchants.

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Open banking, a paradigm that empowers third-party providers to access and utilise customer financial data, continues to reshape the African financial landscape.

As the continent embraces technological advancements and fosters a vibrant fintech ecosystem, open banking has emerged as a key driver of financial inclusion and innovation.

Current Trends and Developments Africa’s open banking landscape is witnessing a surge of activity, driven by several key trends:

Open Banking in Africa Riding the Wave of Innovation & Inclusion

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1

Regulatory Advancements: Governments across the continent are actively developing regulatory frameworks to support open banking adoption, providing clarity and stability for market participants.

2

API Integrations and Standardisation: Open banking APIs are becoming increasingly interoperable, enabling seamless data exchange and collaboration between different platforms.

3

Fintech Collaborations and Partnerships: Fintechs are forging partnerships with banks and other institutions to leverage open banking capabilities and develop innovative financial solutions.

4

Cross-Border Payments Enhancement: Open banking is facilitating efficient and secure cross-border payments, reducing costs and expanding financial access.

4

Data Analytics and Insights: Open banking data analytics are providing valuable insights into consumer behaviour and financial patterns, enabling personalised financial products and services.

Impact on Financial Inclusion Open banking is playing a crucial role in bridging the digital divide and enhancing financial inclusion in Africa: 1

Financial Access for Unbanked Individuals: Open banking enables financial services providers to reach individuals without traditional bank accounts, promoting financial inclusion.

2 Microloans and Financial Assistance: Open banking data enables microloan providers to assess creditworthiness more accurately, expanding access to affordable financial assistance.

3

Mobile Wallet Integration: Open banking is facilitating the integration of mobile wallets with traditional banking systems, providing a more unified and accessible payment experience.

Impact on Innovation and Customer Empowerment Open banking is fueling a wave of innovation and empowering consumers across Africa: 1

Personalised Financial Solutions: Open banking data allows fintechs to develop personalised financial products and services tailored to individual needs.

2 Robo-Advisors and Wealth Management: Open banking enables robo-advisors to provide automated

investment advice based on comprehensive financial data.

3

Enhanced Financial Education: Open banking data can be used to develop gamified financial education platforms, promoting financial literacy.

foster open banking adoption and promote cross-border cooperation.

3

Case Studies of Open Banking Success in Africa Numerous examples showcase the transformative impact of open banking in Africa: 1

M-Shwari (Kenya): M-Shwari utilises open banking to provide microloans to underserved individuals and businesses, empowering financial inclusion.

2 PesaLink (Kenya): PesaLink leverages open banking APIs to enable real-time payments and settlements between different banks, enhancing efficiency.

3

Treasury Prime (South Africa): Treasury Prime harnesses open banking to provide corporate treasurers with real-time visibility into cash flow and transactions.

Challenges and Opportunities Ahead Despite its promise, open banking in Africa faces several challenges: 3

Data Security and Privacy: Ensuring the protection of customer financial data is paramount to maintaining consumer trust and preventing data breaches.

2 Regulatory Framework Harmonisation: A harmonised regulatory framework across the continent is necessary to

Digital Literacy and Upskilling: Upskilling individuals in open banking and financial literacy is crucial to ensure informed participation in the open banking ecosystem.

Recent Developments and Trends The open banking landscape in Africa continues to evolve at a rapid pace, driven by ongoing advancements and emerging trends: 1

Rising Adoption of APIs: Open banking APIs are becoming increasingly adopted by banks, fintechs, and other institutions, facilitating seamless data exchange and collaboration.

2 Data Analytics and Artificial Intelligence (AI): Data analytics and AI are playing a pivotal role in open banking, enabling deeper insights into consumer behaviour and financial patterns, powering personalised financial products and services.

3

Blockchain Integration: The integration of blockchain technology with open banking is gaining traction, offering enhanced security, transparency, and traceability of financial transactions.

4 Regulatory Convergence and Harmonisation: Governments across Africa are working towards converging and harmonising their regulatory frameworks for open banking, 55

creating a more unified and supportive environment.

financial intelligence and fraud detection systems, protecting consumers and businesses.

5 Regulatory sandboxes: Regulatory sandboxes are being established to foster innovation and experimentation with open banking solutions, minimising risks and accelerating market adoption.

2 Sustainable Finance and Impact Investing: Open banking can facilitate the delivery of sustainable finance solutions, empowering investors to align their investments with ESG (environmental, social, and governance) goals.

Impact on Cross-Border Payments Open banking is facilitating seamless and efficient cross-border payments in Africa: 1

Real-time Cross-border Payments: Open banking APIs are enabling real-time cross-border payments, reducing transaction times and associated costs.

2 Lower Cross-border Payment Costs: Open banking is driving competition and innovation in the cross-border payment landscape, leading to lower fees and improved value for customers.

3

3

Access to Global Financial Markets: Open banking is empowering African businesses and individuals to access global financial markets, expanding their trade and investment opportunities.

4 Financial Access for Women and Marginalised Groups: Open banking can be harnessed to expand financial access to women and marginalised groups, promoting financial inclusion and empowerment.

The Future of Open Banking in Africa Open banking is poised to play an increasingly transformative role in the African financial landscape: 1.

Global Leader in Open Banking Innovation: Africa has the potential to emerge as a global leader in open banking innovation, leveraging its unique strengths and challenges to develop cuttingedge solutions.

2.

Driver of Inclusive Growth and Prosperity: Open banking can be a catalyst for inclusive growth and prosperity across Africa, empowering

Emerging Use Cases and Applications Open banking is poised to unlock a plethora of new use cases and applications across Africa: 1

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Financial Intelligence and Fraud Detection: Open banking data can be leveraged to develop sophisticated

Mobile Money Integration: Open banking is enabling deeper integration between mobile money platforms and traditional banking systems, creating a more unified financial ecosystem.

individuals, businesses, and communities to thrive.

3.

Shaping the Future of Finance: Open banking is shaping the future of finance in Africa, driving innovation, enhancing financial inclusion, and empowering individuals to take control of their financial lives.

By embracing open banking and addressing the remaining challenges, Africa can harness the power of technology to create a more inclusive, prosperous, and financially empowered future for its citizens.

Conclusion Open banking is poised to revolutionise the African financial landscape, driving financial inclusion, innovation, and consumer empowerment. By addressing the aforementioned challenges and seizing the opportunities presented by open banking, Africa can become a global leader in open banking innovation and shape a more inclusive and prosperous financial future for its citizens.

Blockchain Unleashed A COMPREHENSIVE OVERVIEW OF ITS EVOLUTION AND IMPACT ON AFRICA IN 2023

B

lockchain technology, the revolutionary concept that underpins cryptocurrencies like Bitcoin and Ethereum, has taken the world by storm, disrupting industries and reshaping the very foundations of commerce and finance. In recent years, Africa has emerged as a captivating hub for blockchain adoption, witnessing remarkable advancements that are poised to redefine the continent’s future, the transformative power of blockchain technology has emerged as a catalyst for progress.

As we delve into 2023, it becomes evident that blockchain is not just a buzzword but a revolutionary force shaping the continent’s economic future.

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Integration into Financial Systems Africa’s embrace of blockchain technology has evolved beyond experimentation, with financial institutions incorporating it into their core systems. Notably, countries like Nigeria and South Africa have witnessed a surge in blockchain adoption, streamlining financial processes and enhancing security.

Fintech Resurgence The fintech sector in Africa has experienced a renaissance, with blockchain playing a pivotal role.

Startups leveraging blockchain are creating innovative solutions for payments, lending, and insurance.

This resurgence is fostering financial inclusion and empowering previously underserved populations.

Cross-Border Transactions Blockchain’s decentralised nature has addressed long-standing challenges in cross-border transactions and is transforming the way cross-border remittances are conducted, addressing the challenges faced by diaspora communities in Africa. Ripple’s collaboration with Onafriq in 2023, as reported by leading news sources, exemplifies how blockchain is reducing fees and settlement times, thus facilitating smoother international financial interactions. Blockchain-based remittance platforms offer faster, more secure, and cheaper transfers, particularly for individuals sending money from developed countries to their families in Africa. This is reducing the financial burden on diaspora families and facilitating faster economic growth.

Supply Chain Transparency

Impact on Economic Growth

Blockchain’s transparent and immutable ledger is being harnessed to enhance supply chain management across various industries, empowering farmers and streamlining supply chains. From agriculture to manufacturing, companies are leveraging blockchain to trace the origin of products, ensuring quality and authenticity. Farmers can now track the movement of their produce from farm-tomarket, ensuring transparency, reducing fraud, and improving pricing transparency. This valuable information empowers farmers to make informed decisions, optimise their operations, and enhance their livelihoods.

The integration of blockchain is

Government Adoption and Regulation:Enhancing transparency, accountability and participation

needed to harness the full potential

Governments across Africa are recognising the potential of blockchain and are working on regulatory frameworks to foster its growth. This move not only provides legitimacy to blockchain-based enterprises but also instils confidence in investors and users. Blockchain is also appreciated for its potential to enhance governance and social impact initiatives.

Governments are investigating blockchain for voting systems, land registry records, and social welfare programs. Non-profit organisations are using blockchain to track donations and ensure transparency in their operations.

This is promoting accountability, improving governance processes, and fostering greater citizen participation in decision-making.

Groundbreaking Applications: Proof of Impact

contributing to economic growth by reducing fraud, enhancing efficiency, and attracting foreign investments. Countries like Kenya and Ghana are witnessing tangible benefits as blockchain projects gain traction, creating a conducive environment for innovation and entrepreneurship.

Blockchain Education and Awareness A notable development in 2023 is the increased focus on blockchain education and awareness campaigns. Initiatives by both public and private entities aim to equip the workforce with the skills of blockchain technology, ensuring sustainable growth

Numerous examples of blockchain’s impact on Africa abound, demonstrating its transformative power: Kenya: The Kilimo Salama platform is employing blockchain to provide weather forecasts, crop insurance, and microloans to farmers, enhancing their resilience, productivity, and access to financial services.

Nigeria: The Bitpesa platform is facilitating cross-border remittances, providing cheaper and faster transfers for Nigerians abroad, improving financial inclusion and bridging diaspora communities.

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Rwanda: The Government of Rwanda is adopting blockchain to digitise land records, enhancing land ownership security and reducing fraud, fostering transparency and promoting property rights.

South Africa: The Backbone Blockchain Network is connecting banks, mobile operators, and retailers, enabling real-time payments and settlements between different financial institutions, improving efficiency and reducing costs.

Addressing Challenges: Fostering Sustainable Growth While blockchain adoption in Africa is gaining momentum, several challenges remain, including: Infrastructure and Connectivity: Ensuring adequate internet connectivity and reliable infrastructure across the continent is crucial for widespread blockchain adoption.

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Skills Development: Upskilling individuals in blockchain technology and digital literacy is essential to ensure effective utilisation of blockchain solutions.

Regulatory Framework: Developing clear, supportive regulatory frameworks is vital for fostering innovation, protecting consumer rights, and promoting responsible blockchain adoption.

The Road Ahead: A Blockchain-Powered Future Blockchain technology holds immense potential to transform Africa, addressing long standing challenges and driving inclusive growth across various sectors. As adoption continues to grow, Africa is poised to become a global leader in blockchain innovation, shaping a more equitable and prosperous future for its citizens.

Conclusion: Africa’s Digital Leap with Blockchain Africa’s embrace of blockchain technology is a testament to its innovative spirit, entrepreneurial drive, and willingness to embrace change. As blockchain adoption continues to accelerate, Africa is poised to become a driving force in the global blockchain revolution, shaping a more inclusive, transparent, and prosperous future for its people. Africa’s digital transformation is underway, and blockchain is playing a pivotal role in shaping a brighter, more connected, and equitable future for the continent.

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