Digital Banker Africa Spring 2021

MODERNISATION OF

IN PARTNERSHIP WITH

PAYMENT SYSTEMS

MASTERCARD

EVERYTHING YOU NEED TO KNOW ABOUT NFTS

CARDANO AFRICA:

BREAKING DOWN BARRIERS

INVESTING IN AFRICA’S

LOCAL AND GLOBAL TECH POTENTIAL

DIGITAL BANKING IN

EMERGING MARKETS

DIGITAL FINANCE PRACTITIONERS ASSOCIATION OF ZIMBABWE

USHERING IN A NEW ZIMBABWE THROUGH

DIGITAL TRANSFORMATIONS

DIGITAL BANKER AFRICA I CONTENTS

CONTENTS DIGITAL BANKING

10 14

Neo bank V Challenger bank: Spot the difference Digital banking in emerging markets

DIGITAL TRANSFORMATION

18 20

Covid assisted digital transformation Austin’s five forces model for digital transformation

FINANCIAL INCLUSION

22

Financial inclusion, Cross-border payments and the african continental free trade agreement (afcfta)

24

CASHLESS ECONOMY

24

Partnerships with Telcos, Fintechs and Banks crucial to support Nigeria’s cashless economy

OPEN BANKING

28

Open Banking is crucial to unlocking Africa’s massive informal market

COVER FEATURE

30

DIGITAL FINANCE PRACTITIONERS ASSOCIATION OF ZIMBABWE USHERING IN A NEW ZIMBABWE THROUGH DIGITAL TRANSFORMATION

30

DIGITAL BANKER AFRICA I CONTENTS

TOP 10 WOMEN

34

Top 10 Women to Watch in Banking and Finance (2020)

42

Investing in Africa’s local and global tech potential

46

Modernisation of Payment Systems

46 FINANCIAL REGULATION

50

Is capacity building a necessary requirement for enhanced and forward-looking regulatory change?

PAYMENT

54 50

56

Why customers must come first Why it’s important for businesses to be proactive about cybercrime

BLOCKCHAIN

58

The outlook for central bank digital currencies

64

Everything You Need to Know About NFTs

60

Cardano Africa: Breaking down barriers

66

Teraco To Enhance Regional Interconnection Through The METISS Cabling System

DIGITAL BANKER AFRICA I FOREWORD

Welcome to the spring edition of

DBA2021!

Welcome to the spring edition of Digital Banker

“New beginnings bring about opportunities for

Africa! You could say we have a ‘spring’ in our step,

transformation” says Austin Okere as he introduces

as we are proud to announce our new partnership

us to his five forces model.

with Mastercard. This new strategic partnership further underlines Mastercard and Digital Banker

We also take a look at the top 10 women to watch

Africa’s emphasis on innovation, safe and secure

in Banking and Finance presented by the Angaza

payment services and extending financial inclusion.

awards.

Our front cover story features Gerald Nyakwawa

As the prospect of a cashless Africa grows we will

Chief Association Executive of DFPAZE who

continue to keep our readers abreast of the changes,

discusses the digital transformation currently

challenges and of those who continue to shape the

taking place in Zimbabwe.

digital banking space.

Happy reading !

CONTRIBUTORS LIST I DIGITAL BANKER AFRICA

THANK YOU TO OUR CONTRIBUTING WRITERS IN DBA SPRING 21 JOHN KANE

Chief Innovation Officer Tyme

RACHEL FREEMAN Chief Growth Officer Tyme

ALI HUSSEIN KASSIM Co-Founder & CEO Kipochi

AUSTIN OKERE

Founder, CWG Plc and Entrepreneur in Residence, Ausso Leadership Academy

AZUKA MORDI

Market Product Management, Digital Payments and Labs (West Africa) Mastercard

MURRAY GARDINER MD of Bluecode Africa

IAN LESSEM

Managing Partner HAVAÍC

TREVOR CRACKNELL Head of product Finteq

NOLWAZI HLOPHE

Deputy Director Financial Regulation and Supervision Digital Frontiers

DARE AYANWALE

Payment System Specialist Nigeria Inter-Bank Settlement Systems PLC

RYAN MER

Managing Director Eftsure

MAYOWA AGBELUSI Central Bank of Nigeria

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 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.

DIGITAL BANKING

NEO BANK V CHALLENGER BANK:

SPOT THE DIFFERENCE The financial crisis of 2008 changed the global economy to a great extent. It also changed the method of the traditional banking and finance industry by providing cost-efficient and fast financial services to a wide range of customers. Digital banks are now providing financial services to the under banked and unbanked population. Technological advancements also paved new paths for financial institutions with the inclusion of block chain, artificial intelligence, machine learning, etc. Customers are able to access a wide range of financial services by a single click. Currently there are many neo banks and challenger banks working in Africa to provide tech driven technological products. Both of the terms are used interchangeably while referring towards digital banking. But these two terms are different from each other on the basis of their features.

WHAT IS A NEO BANK? A Neobank is a digital bank that is entirely cloud based without any traditional branch network.

Neobanks can be called fintech firms that provide digital and mobile-first financial solutions payments, money transfers, money lending, and more. The idea was first launched in 2010, to offer better financial solutions to new start-ups and SMEs. Neo banks provide limited financial services as compared to the traditional banking systems but they provide cost-efficient services.

Usually, they pay higher interest rates to their customers. The fees charged by neo banks are very low as compared to the traditional banks thus making them more popular among customers in the modern banking industry. Neo banks appeal to the customers who more rely on digital transactions and like to manage things by just using simple apps on their mobile phones .Few examples of neo banks in Africa includes Cowrywise, 10

DIGITAL BANKING

PiggyVest, Chippercash and

banks are not chartered with federal

financial challenges. Lidya is an

SOLwallet.

regulators or banks. They provide

African neo bank which provides

online banking services mainly

affordable credit options to small

based on mobile phone apps.

and medium size businesses with

HOW DO NEO BANKS DIFFER FROM CREDIT UNIONS AND TRADITIONAL BANKING?

WHAT DO THEY OFFER?

the help of online platforms.

As neo banks don’t have a license,

Neo banks offer flexibility to

they are dependent on their

Neo banks are different in their

SMEs and new startups as they

partner bank inorder to operate.

nature of operations from the

have limited liquidity reserves.

They provide checking and saving

traditional banks. They do not

They provide many financial

accounts, financial education tools,

provide credit in the form of

services to SMEs which include

payment, and money transfer

overdrafts. They make partnerships

expense management, automated

services. To minimise their risk

with traditional banks to insure the

accounting services, etc. They

and costs, neo banks offer limited

deposits of their customers. Neo

help them against their corporate

credit. They may offer loans to their customers through their partner traditional banks or credit unions. Some of the neo banks were previously working as lending firms. Now they provide both deposit and loan accounts. An example of such a kind of neo bank is Eversend.

HOW DO NEO BANKS WORK? In the case of a neo bank, the customer only needs to create an account on their platform and sign in. After signing in, he can enjoy the services offered by the bank. But it should be kept in mind that they do not replace the traditional banks as financial services provided by the neo banks are very limited. They cannot meet the demands of each type of banking customer.

Some neo banks allow customers to link their traditional bank account with them. It is very important for the customers to check that their neo bank is offering federally insured deposit accounts or not. As in the case of non-insured deposit accounts, their money is exposed to 11

DIGITAL BANKING

HOW CHALLENGER BANKS DIFFER FROM TRADITIONAL BANKING

range of customers and businesses.

FDIC insurance on the deposited

The main difference between a

were under-served by the traditional

money.

challenger bank and a traditional

banking sector.

unnecessary risk. As neo banks don’t possess a license so they ally with other traditional banks or credit unions so they can offer

Existing traditional banks also recognised the importance and demand of the neo banking products and services. They also started providing similar products and services to compete

bank is that they focus on providing an online customer experience.

They offer a wide range of products to their customers which is easily accessible and provide better interest rates.

They work as digital banks and provide technology-based products and services to the customers who

Neo banks also provide personal as well as business accounts. But they mostly focus on providing technology-driven products and services to SMEs and new startups. They work as online financial

with the neo banking industry.

A survey done by Moneyfacts found

technology firms and provides

They introduced products that

that the challenger banks are

necessary corporate financial needs.

attract the under banked and

providing 11 additional financial

tech-savvy consumer base.

products as compared to the

CHALLENGER BANKS These are the small-size retail banks that also use digital

traditional banks. They also found that on a 1 year fixed rate bond, challenger banks are offering a 0.66% higher average return.

platforms along with the physical

Challenger banks are continuously

presence to provide financial

introducing innovation in their

services. Although their physical

products and services to meet the

presence is on a small scale they

diverse needs of the current finance

differ from neo banks as they

industry.

provide both traditional banking services and fintech-based operations. There are almost

Key differences between both banks

Banking license Challenger banks have banking licenses so they can provide a wide range of financial products and services. They can issue credit cards and grant loans.

Neo banks don’t have any licenses.

They can provide these financial services only when they have a partnership with some licensed traditional bank or credit union.

Some banks started business as neo

Following are some main differences

banks but they got licensed later on

between both banking industries.

and become challenger banks.

Physical Presence

Future of both banking industries

examples of African challenger

Challenger banks have some physical

Depending upon the customer’s

banks.

branches as well as an online

need, challenger and neo banks are

banking platform. While neo banks

providing innovative technology-

were started in 2017 to bridge the

driven products and services. They

gap between traditional banking

are going to make rapid speed

financial institutions and fintech.

with the increased usage of digital

They are a cloud-based online

banking in the coming decade. This

system without any local branches.

decade started with the spread of a

100 challenger banks currently operating around the globe.

Tyme, Discovery, Bank zero and Barko financial services are few

Challenger banks could be subcategorised into digital challenger banks, Commercial lenders, and challenger banks with physical branches.Where digital includes entirely online

deadly virus Covid 19 which affected

organisations like Tymebank.

Accounts, Services, and products

Barko financial services bank

almost every sector of the economy.

offered

Neo banks and challenger bank’s

is an example of a commercial lender.

Challenger banks offer business as well as personal accounts to a wide

12

digital services are the best options in the current scenario.

TRADE AGREEMENT

13

DIGITAL BANKING

DIGITAL BANKING IN

EMERGING

MARKETS

T

yme is a digital banking group focused on empowering financial inclusion in emerging markets by integrating banking into physical retail ecosystems. Tyme

originally started as a domestic remittance fintech in 2012 in South Africa, but quickly realized that the key to financial empowerment is through regulated financial institutions. In 2017, Tyme obtained a full banking license from the South African Reserve Bank and launched TymeBank in February 2019. Within 12 months from launch, TymeBank acquired > 1 million customers. TymeBank now has 3.2 million customers and is one of the fastest growing digital banks in the world.

Tyme stands for providing simple, efficient, and responsible banking. We believe well designed financial services can help even the most vulnerable in society take advantage of economic opportunities, and better deal with potentially devastating life events. At Tyme, we are driven by the conviction that broadening economic participation is the foundation for human growth. Digital technologies today offer us the tools to rebuild banking for the under-banked and underserved. However, we don’t believe that having a smart phone and using social media necessarily translates into a customer trusting a digital bank with their savings.

Launching a successful digital bank has universal challenges that all institutions will face, whether in developed markets or emerging markets, but digital banking in emerging markets does carry some unique challenges in order to gain a widespread, mass market customer base.

14

John Kane

chief innovation officer Tyme

Rachel Freeman

Chief Growth Officer Tyme

To be successful in any market: •

A digital bank must secure meaningful access to customers. A first interaction seems easy on a smartphone, but these can actually be very

DIGITAL BANKING

difficult to manufacture. Most potential customers

•

A digital bank must develop a strong trust

are blind to digital advertising, and onboarding

relationship with the customer. Trust in the

on the phone can be cumbersome for even the

digital banking brand is the single most important

most digitally savvy. Combine these challenges

indicator of continued usage. Creating trust is

with the need for the customer to first download

difficult even in markets with strong depositor

an application before they get to the onboarding

protection. Creating trust takes time and is

process, and you are asking a lot of a customer you

expensive, requiring significant investment by the

have never engaged with before. The negative cost

digital bank. This starts with a positive onboarding

effects of this are compounded by the fact that

experience, but customer onboarding processes

the ability to acquire customers is constrained by

can be intimidating leading to substantial drop

marketing spend, and creating brand awareness

off. And, while the apps may be easy to use, a

through digital advertising often reduces efforts in

customer’s lack of understanding of the channels

customer education, a crucial element of long-term

and products can translate into no or low usage of

digital banking customer adoption and financial

many services.

return. In our experience, the costs of acquiring customers are really the costs of acquiring active

The above challenges are universal to all digital banks,

customers, and education, not brand awareness,

no matter how developed the market, but digital

determines the activity level of a customer.

banking in emerging markets with lower access to financial services and digital and financial literacy brings several new challenges. A digital bank must engage even closer with its clients to secure both the access to the customer and, more importantly, the trust in order to gain long-term adoption and active customer usage.

More specific challenges to digital banking in emerging markets are: •

Ease of cash in – cash out: A digital bank must ensure the ability to easily move cash to digital and back to cash. Currently, over 90% of transactions are cash-based in emerging markets so cash is still king. This means that to believe in digital money, customers must also believe that they can turn cash digital and back anytime they want. There must be as little friction as possible in daily spending patterns and transacting, as cash has its issues but has little friction in transacting.

•

Ease of location: A digital bank must have ubiquitous points of representation. Customers will only test out the digital bank if it is easy to find and engages the customer where the customer already is. In emerging markets, a digital bank builds trust through physical locations, where customers 15

DIGITAL BANKING

•

can see the institution in their

TymeBank in South Africa. In

fully KYC’ed bank account in under

own respective ecosystem.

solving these challenges, we took

5min, without the need for any

Customers will only continue to

a customer-centric approach

paperwork (just an ID number and

use the digital bank’s products

that looked at the average

a cellphone). Customers can open a

and services if the digital

South Africans’ daily challenges

fully FICA-compliant bank account

bank is embedded into the

and established solutions and

and receive their personalized Visa

customers’ ecosystem.

channels which would unblock

debit card at a TymeBank kiosk in

any impediments that they have

under five minutes. After receiving

in accessing banking in their own

the debit card, customers may

individual ecosystems.

transact straight away at the store

Ease of understanding digital channels: a digital bank must

cash register, allowing easy cash

meet customers where they are in their digital journey.

Customers are looking for their digital bank to walk the path to digital with them.

Channels must reflect where the customers are now and enable them to steadily engage digitally together. The assumption that all (or even the majority) of customers are already digitally savvy and ready for digital financial services risks offending the customer – a dead end for all engagement.

•

Ease of understanding products: a digital bank must engage deeply on its product mix and not err on the side of too many or too complex products. Payments can be the ticket to play, but it is not the prize. While also addressing 100% of the market’s needs is too complex and leads to too large an organization, a digital bank that meets too few needs translates into the game of diminishing returns as the digital bank is too easy to

Retail outlets with a national footprint was our first step to secure ubiquitous points of representation in the customer’s ecosystem.

TymeBank formed a long-term strategic partnership with PicknPay and Boxer stores, allowing its customers to bank where they shop, at PicknPay and Boxer stores around the country. Customers can both onboard and activate the account at the stores, allowing customers to engage in their banking in their most used ecosystem, their grocery store.

substitute.

Secondly, to enable easy customer The above is the conceptual

onboarding, we developed the

framework in which Tyme launched

TymeBank kiosk which opens a

16

in – cash out while buying your groceries. This means that across South Africa, customers have 14,000 till points (cash registers) for cash in – cash out, embedded right into their grocery shopping experience.

And third, to provide customer education, we placed Ambassadors at these kiosks in the retail outlets.

The Ambassadors assist customers through our digital onboarding journey as well as educate them on how to use our products in our channels. Our in store Ambassadors are local, formally unemployed youth from the local community who play a pivotal role in driving customer trust.

Using this approach, TymeBank fundamentally changed the banking landscape in South Africa by offering easy to access, transparent, and customer centric financial products and services for the mass market - for all South Africans.

With our success in South Africa, Tyme’s next deployment will be in the Philippines. With over 70% under-banked and unbanked, the Philippines is the ideal next market to test Tyme’s unique model for digital banking.

Join us as we celebrate the Top 10 Women to Watch in Banking and Finance (East Africa) and launch the 2021 Angaza Pan-African Awards which will spotlight leading women across the Continent who are shaping the financial services sector

Tuesday, 8Th June 2021 • Zoom evenT 2 - 3 p.m. West africa Time 3 - 4 p.m. south african standard Time 4 - 5 p.m. east africa Time regisTraTion

https://kenyanwallstreet.com/top-10-women-in-banking-and-finance

BroughT To you By

KeynoTe speaKers

Dr. Nancy Onyango

Director, Office of Internal Audit and Inspection at the International Monetary Fund

Gail Evans

New York Times Best-Selling Author

DIGITAL TRANSFORMATION

COVID ASSISTED

DIGITAL TRANSFORMATION No one ever saw the coming of the seismic shift that was caused by

Ali Hussein Kassim Co-Founder & CEO

the CoronaVirus. One thing that a

Kipochi

device communication protocols and sensor implementation will allow asset management companies

number of us predicted correctly as

access relevant data across fields

we ushered 2020 was the increased

such as retail, agriculture for

focus by Policy Makers and Regulators on Big Tech and Fintech.

Here are my predictions for the rest of the year.

Communist Party to America’s Big

1

Tech antitrust woes, stuff really hit

leading tech will become even

Boy, were we on the mark! From Alibaba’s Ant Group about to hit the reset button courtesy of the Chinese

the fan. Not a moment’s boredom.

As we enter the second month of the 2nd quarter what’s your 2021 shaping to look like?

18

IOT will finally enter mainstream usage at scale.

Companies like Schneider

Electric with their industry more interesting. How will this affect the banking sector? IOT will make access to data for credit risk assessment easier to access.

Technologies such as device-to-

enhanced decision making.

2

We’ve seen a concerted Global Backlash against Big Tech.

First by governments and

now by consumers. Techlash will now enter the mainstream lexicon.

Techlash is the term first coined by The Economist to describe this new phenomenon. The Oxford English Dictionary defined the word as “A strong and widespread negative reaction to the growing power

DIGITAL TRANSFORMATION

controlled by a handful of private

driven by cheaper smartphones and

capitalists. We are already seeing

the Use Now Pay Later phenomenon

this play out in America where the

that Telcos are using in partnership

Justice Department has frustrated

with various players including

the acquisition of Plaid (a financial

Google. This will drive more usage

services company based in San

of services like digital banking and

Francisco, California. The company

eCommerce.

builds a data transfer network that powers fintech and digital finance products) by Visa Inc, an American multinational financial services corporation headquartered in Foster City, California, United States. It facilitates electronic funds transfers throughout the world, most commonly through Visabranded credit cards, debit cards and prepaid cards

5

As regulation becomes

and influence of large technology companies, particularly those based in Silicon Valley.”

3

Digital Transformation will accelerate. Accelerated because of COVID-19 in

2020 it will become mainstream.

Industries like Media, that have already been decimated by forces like Big Tech, will accelerate their

ubiquitous, companies, large and small, will learn to live

with it and even thrive. There is no choice in this as you will either have a seat at the table or be on the menu.

6

7

From a business perspective, more SMEs will adopt Work From Home options driving

further the adoption of technologies like Employee Productivity Tools that include virtual meeting platforms. Enter the tech-enabled workspace.

8

Last but not least Government is in on the game. From Digital Taxes

that have become the rage the world over to more enhanced and digitally enabled Government to Citizen communication. This is manifesting itself more through the introduction and in some cases expansion of government services

From a purely African

via eCitizen Portals, digital IDs

perspective we will see

and taxation.

an increased number of

smartphone users coming online

transformation or die. We are already seeing the effects of that across Africa as tech startups, especially in the Fintech space, are raising humongous amounts of money to upend the hegemony of the incumbents. Players like Flutterwave and Interswitch are now more valuable than many banks on the continent.

4

The pace of consolidation in the tech industry will slow down as policy makers and

regulators come to terms with the clear and present danger of too much economic power in industries

CB Insights’ the Tech-enabled office journey 19

DIGITAL TRANSFORMATION

Austin’s five forces model for

digital

transformation

New beginnings (such as the current pandemic) bring about opportunities for transformation if we suppress current realities and augment possibilities.

This enables us to adopt agile strategies to create new systems which then become our new realities. I have codified below, the relation between Transformation, Vision, Team, Time, Resources and Resolve in a model which I call the Austin’s 5 Forces Model for Transformation.

Prime Minister Kuan Yew Lee visiting housing project.

(Photo by Larry Burrows/The LIFE Picture Collection/Getty Images)

Transformation, Social-Political,

It was his leadership that

Economic or Business, rests on five

transformed Singapore from

forces as follows:

a third world country into a

1.

Vision

thriving metropolitan city in just three decades. His famous saying “The Impossible Can Happen!”

A great vision is the first force

encapsulated the power of his

and the crux of any transformation

vision. The clarity of the vision

journey. Singapore under the

engenders team conviction.

leadership of Lee Kwan Yew provides a perfect example.

Lee Kuan Yew was the first and

2.

Team

longest-serving Prime Minister of Singapore.

The second force of the transformation journey is a high performing team or a winning team.

A winning team has both Aptitude and Attitude, and consistently demonstrate a keen sense of critical thinking, pace, and agility. They have a deep sense of alignment to the vision and autonomy to operate freely, while keeping an eye on the big picture. They understand the WHY of their roles and not just the WHAT and HOW. Such a team led by a visionary leader is a lethal force for transformation. At its height, NASA estimates that a total of 400,000 men and women across the United States were involved in the Apollo programme. Neil Armstrong and his right-hand man Buzz Aldrin on the lunar landing module are exemplary of a great team.

20

DIGITAL TRANSFORMATION

3.

Time

The third force in the transformation journey is time.

This is the most significant limiting factor of all constraints. The whole Apollo project would have been futile if their fiercest competitor, Soviet Union, had been able to achieve it first.

The Leicester winning team in 2016…

4.

Resources

While resources are not unlimited, they must be provided in adequate measure to prosecute the vision.

Reaching the moon was a giant leap for mankind. The Apollo program’s total cost was about $25.4 billion, about $152 billion in today’s dollars.

Hundreds of companies helped construct the Apollo spacecraft, while Neil Armstrong, Buzz Aldrin and Michael Collins exhibited great resourcefulness complimentarily.

The rapid prototyping and deployment would have been impossible without that kind of Resources that were made available, and the resourcefulness of the team.

5.

Resolve

Of all the forces for transformation,

City, Chelsea and Liverpool.

perhaps the most crucial is Resolve.

Resolve speaks to the tenacity of the

It is this Will Power to succeed

team to achieve the vision.

that determines the fortune of a venture. It is resolve that drove

I will like to give credit to all

Thomas Edison in the discovery

transformational leaders, whose

of the electric bulb. Edison

works have provided valuable

and his lab associates, called

insights, and also to my dear Son,

“Muckers,” conducted thousands of

Omimi Okere, of Common Studios for

experiments to develop the electric

correctly interpreting my model in an

light bulb. To make it functional,

aesthetic schematic.

each step required the invention of a new component, from vacuumed and sealed glass bulbs to switches, special types of wire and meters.

Like previous efforts, the greatest challenge was coming up with a material that could serve as a long-lasting filament. After testing thousands of materials, including over 6,000 types of plant growths, they found the best substance was carbonized cotton thread.

It is resolve that made an obscure team such as Leicester City win

The three crew members of NASA’s Apollo 11 lunar landing mission pose for a group portrait a few weeks before the launch, 1st May 1969. From left to right, Commander Neil Armstrong, Command Module Pilot Michael Collins and Lunar Module Pilot Edwin ‘Buzz’ Aldrin Jr. (Photo by Space Frontiers/ Getty Images)

the English premiership league in 2016 against more formidable and established opponents such as

Austin Okere Founder, CWG Plc and Entrepreneur in Residence, Ausso Leadership Academy

Austin Okere is the Founder of CWG Plc, the largest security in the technology sector of the Nigerian Stock Exchange, and Entrepreneur-in-Residence at CBS, New York. Austin also serves on the Advisory Board of the Global Business School Network, and on the World Economic Forum Global Agenda Council on Innovation and Intrapreneurship. Austin now runs the Ausso Leadership Academy focused on Business and Entrepreneurial Mentorship.

Manchester United, Manchester 21

FINANCIAL INCLUSION

FINANCIAL INCLUSION, CROSS-BORDER PAYMENTS AND

THE AFRICAN CONTINENTAL FREE TRADE AGREEMENT (AfCFTA) Mayowa Agbelusi Central Bank of Nigeria

Intra- African Trade There is very little formalized trade going on between African countries. Intra-continental trade, the average of exports and imports between countries in the same continent, was around 2% between 2015

customs clearance (AfDB, 2012). Informal trade can be beneficial to those living near borders as it provides livelihoods, contributes to job creation and ensures food security through the trade of agricultural products, but it comes at the cost of reduced tax revenue and undermines policy-making efforts.

to 2017 in Africa, compared to 47% in America, 61%

Due to low levels of financial inclusion in Africa,

in Asia, 67% in Europe and 7% in Oceania (UNCTAD,

this trade is largely financed through informal

2019). This is because intra-African trade is largely

financial systems, making it difficult to measure

informal, yet it accounts for over 60% of regional

the value of sub–Saharan Africa’s share of global

trade (OECD, 2020). This trade is usually conducted

trade. The formal financial channels for cross-border

by small businesses and individual traders in goods

transactions are too expensive for small traders in

which may be legal on one side of the border and

Africa, access to cheaper and more efficient formal

illicit on the other side due to not having been

financial services can help to boost intra-African

subjected to statutory border formalities such as

trade.

22

FINANCIAL INCLUSION

AfCFTA and the high cost of cross- border payments The African Continental Free Trade Agreement (AfCFTA) was signed by 54 countries and ratified by 36 African countries. It started officially on January 1, 2021, and seeks to create a single African market by removing 90% of tariffs and providing free movement of goods, services, and capital. The AfCFTA needs a thriving and more inclusive financial system to succeed as the World Bank estimates $292 billion in income gains from stronger trade facilitation such as cheaper cross-border payments, but the high cost of moving capital across Africa is a barrier to success.

It is more expensive to send money to Sub-Saharan Africa (SSA) than any region in the world. Statistics from the World Bank show it costs 8.9% in fees to send money to SSA, higher than the global average of 6.8%. In 2019, senders paid an average transaction fee of 25.1% to send money from South Africa to China while transfers from Cameroon to Nigeria cost 15.5%. Financial inclusion through mobile money for participants in the informal economy is key to reducing the cost of cross-border payments.

Financial inclusion through mobile money According to the World Bank, only 20% of the SSA population has a bank account compared to 92% in advanced economies and 38% in non-advanced economies. The high cost of formal financial services pushes people to informal channels. While Nigeria’s diaspora remittance ($25.3 billion as of 2019) is the highest in Africa, the Centre for Financial Regulation and Innovation (CENFRI) estimates that an additional 50% of remittance value is transferred informally.

Such significant economic activity happening outside the formal system increases the risks of money laundering and terrorist financing, it also denies the unbanked the benefits of access to financial services such as increased productive investment

more people with formal financial services. In 2019, 50 million sub-Saharan Africans created a mobilemoney account via a mobile phone, representing a 12% increase compared to 2018 and bringing the total number of users up to 469 million across the region (Africa Report, 2020). Mobile money wallets from operators such as Paga and Safaricom have emerged as a cheap and fast alternative to traditional financial institutions which do not have the infrastructure and personnel to adequately serve the rural areas.

For example, Nigeria has only 4.3 commercial bank branches per 100,000 adults and 16.93 ATMs per 100,000 adults (World Bank, 2018), excluding a large rural population from formal financial services.

The role of the CBN in improving cross-border payments The large volume of cross-border payments outside the formal financial system makes it difficult for the Central Bank of Nigeria (CBN) to carry out its monetary stability mandate. To drive financial inclusion in Nigeria, the National Financial Inclusion Strategy (NFIS) was launched in 2012 and revised in 2018, as a result, Nigeria’s financial exclusion rate dropped from 46.3% to 36.8% in 2018. This was achieved through focus on identity management through the Bank Verification Number (BVN), payments system, agent banking and mobile banking.

Unfortunately, the target of reducing financial exclusion to 20% by 2020 was not met, and this has been attributed to the fact that Nigeria uses a bank-led mobile money model and as a result 71.3% of adult mobile phone users were still financially excluded in 2019. To remedy this, the CBN approved the creation of Payment Services Banks (PSBs), which allows mobile network operators to provide basic financial services to customers. The existing SIM registration database and KYC support the onboarding of all mobile phone owners, solving the identity management problem.

A thriving and inclusive payments’ system is vital to

and consumption.

the success of the AfCTFA. The CBN as the financial

The availability of cheap mobile devices and the

role in this success by deepening financial inclusion in

high mobile-phone penetration rate has led to the rise of mobile money in Africa and can help provide

regulator of Africa’s largest economy can play a major Nigeria and democratising cross-border payments.

23

CASHLESS ECONOMY

PARTNERSHIPS WITH TELCOS,

Fintechs and Banks crucial to support

Nigeria’s cashless economy Azuka Mordi

COVID-19 brought a public health challenge to Nigeria, but it also resulted in an economic downturn on the back of a pandemicinduced recession. The pandemic highlighted the need to diversify the economy to develop a wide range of growth industries and sectors in addition to the more traditional ones such as oil and gas.

Market Product Management, Digital Payments and Labs (West Africa) Mastercard

The growth of the digital technology sector in Nigeria is an indication that the sector can serve as a catalyst for advancing the digital economy, while enabling economic recovery and growth.

The NBS report noted the significance of the ICT sector, as it was the leading driver in the non-oil sector that lead to GDP growth and economic recovery in 2020. The World Bank’s Nigeria Digital Economy Diagnostic Report highlights that Nigeria is uniquely positioned to reap the benefits

24

of the digital economy as the country accounts for 47% of West Africa’s population, and half of the country’s 200 million people are under the age of 30. The report goes on to acknowledge Nigeria as the largest mobile market in SubSaharan Africa, supported by strong mobile broadband infrastructure.

At the same time, minimal fixed infrastructure and connectivity in rural areas can leave the most marginalized people behind.

Partnerships with government, fintech players, telecom companies and other strategic partners to provide digital solutions and support the cashless economy, offer the greatest potential to overcome infrastructure barriers to accelerate

CASHLESS ECONOMY

An example of this is Mastercard’s recent partnership with MTN which enables millions of consumers in 16 countries across Africa to make global e-commerce payments safely and securely, with or without a bank account. Last year, we launched a Pay-on-Demand mobile platform in Uganda with Samsung, Airtel and Asante Financial Services Group which provides end consumers and MSMEs with asset financing to access smart handsets at a low upfront cost while making affordable payments over time.

In addition, Mastercard and Airtel’s digital partnership will enable access for over 100 million mobile phone users in 14 African countries to virtual card numbers (VCN) and QR Payment capability – even though they don’t have a bank account. Mastercard also aims to onboard over 40K SMEs as merchants on QR. The partnership financial inclusion and drive

contactless payments can energize

economic growth across multiple

the industry even further.

sectors.

As a trusted partner that has

Digital innovations are key to

developed its secure, innovative

advancing financial inclusion. They

payment technology over many

are the big equalizers, enabling and

years, Mastercard is driving growth

spearheading financial inclusion

in digital financial services through

for people and small businesses

digital partnerships, solutions and

alike. The foundation to enable

technology, extending acceptance

payment technologies for a robust

infrastructure and aiming to

digital economy is being laid

connect 1 billion people to the

one regulation at a time. Recent

digital economy by 2025, including

frameworks issued by the Central

50 million micro and small

Bank of Nigeria on Sandbox, QR,

businesses, with a direct focus on 25

Open Banking and others, are

million women entrepreneurs. This

expected to galvanize and accelerate

can be achieved by making it easier

the digital economy agenda by

to accept electronic payments,

allowing more innovation. Creating

along with greater access to credit

certainty in other areas such as

to grow and scale.

has made Airtel one of the largest offline-to-online digital payment networks in Africa.

We have deployed product solutions designed to achieve three key objectives. The first objective is to grow acceptance, especially for micro-payments in rural areas.

Secondly, to provide cost-effective merchant payments (near zero cost) for domestic payments.

And finally, to achieve instant settlement for all merchants, regardless of mode of payment or acceptance. We delivered these objectives via market product solutions such as Mastercard QR which enables consumers to pay via their mobile devices by snapping a photo of a QR code sticker or poster 25

CASHLESS ECONOMY

presented by merchant, Tap on Phone solutions that allow a merchant to turn their mobile phone into a contactless acceptance device and Mastercard Payment Gateway Service which enables acquiring banks to offer e-commerce payment solutions to small merchants via our Simplify system.

The PEDD approach consists of five steps:

Mastercard solutions assist businesses and consumers to thrive in the digital economy by utilizing safe and secure digital payment channels.

But governments are benefiting too, Mastercard applies its technology to assist countries and stakeholders to digitize economies and develop successful, interoperable payment ecosystems that can support sustainable growth and wider financial inclusion. Our research has found that cash prevalence can have a high economic cost – estimated at 3.2% to 4.5% of global GDP. Mastercard’s Payments Ecosystem Design & Development (PEDD) methodology offers cash-cutting solutions and helps governments develop a blueprint of their digital economy to mitigate the costs of cash and build domestic payment ecosystems.

26

size the payment flows, determine the drivers of cash, design the strategy, prioritize the initiatives, and propose an implementation plan built on public-private partnership that also advances financial inclusion.

Some of the PEDD initiatives that we’ve successfully carried out include: •

Digital immunization records with Gavi The Vaccine Alliance, a digital voucher program with the World Food Programme.

•

A digital marketplace for farmers via the Mastercard Farmers Network (MFN), and

•

A digitized school ecosystem through the Kupaa initiative in Africa that allows parents, schools and governments to make and track school payments.

•

These initiatives are also starting blocks for future Smart Cities as they digitize the citizen journey within the payments value chain, thereby creating a seamless experience.

The growing reach of mobile technology creates a tremendous opportunity for the payments and technology industries to bring more people and businesses into the formal economy. Through partnerships, we can achieve a digital payments economy that includes everyone, mitigates the costs of cash, and achieves the sustainable economic growth and inclusive well-being that we want for Nigeria.

Pay

27

OPEN BANKING

OPEN BA NK I NG I S C RU C IA L T O

UNLOCKING AFRICA’S MASSIV E I NF ORMAL M A RKET In Europe, the Open Banking concept aims to foster a more dynamic and customer-centric financial market.

Using secure application programming interface (API) integration with banking systems and mutually

Murray Gardiner MD of Bluecode Africa

agreed security and technology protocols lets consumers expose their banking data to third-party

interoperability, a four party Open Banking digital

fintech providers for new and innovative financial

mobile payment scheme is required.

products and services. This principle is particularly valuable in the domain of digital payments in

A four-party payment is where different financial

emerging markets.

institutions agree to a common set of rules for the clearance and settlement of a defined payment type.

In Africa, by contrast, digital mobile payments,

This means a customer from Bank A can pay at a

modelled on the person-to-person (P2P) three-

merchant who banks with Bank B. Neither banks nor

party payment innovation pioneered by Safaricom’s

merchants or consumers know (or care) who banks

M-Pesa mobile payment, have become ubiquitous.

with whom, yet the payment works.

M-Pesa is now a de facto payment scheme in East Africa, having secured market dominance by

This kind of account-based, non-card based, open-

exploiting its first-mover advantage in Kenya. Any

loop payment works in an Open Banking environment.

two M-Pesa customers can pay each other instantly

First, the participating financial institutions need

through SMS messaging.

to agree on a set of rules. Then, they expose access to the customer account through secure APIs which

However, now that banks are launching their own

are approved as an acceptable standard compliant

siloed QR digital payments, all three-party payments

with local regulation,security, and data protection

are limited to a single ecosystem where the payer

protocols. Banks can then provide their merchants

and payee are both users of the same mobile network

and their customers with access to a digital option to

operator (MNO) or bank. This means that no single

pay at any merchant that displays acceptance of the

provider has the local market dominance to replicate

payment type by any participating bank.

the M-Pesa story.

The UK is leading the pack with Open Banking by Payment between separate siloed financial

allowing third-party providers to access the financial

institutions is more challenging. Instant payment and

information of banking customers through secure and

settlement gateways achieve some of the benefits

approved APIs. The idea is to provide customers with

of interoperability but are still limited, particularly

more customer-centric and personalised products

when it comes to merchant payments and acceptance

and services while also fostering fintech innovation

of digital payments by businesses. To achieve real

and competition in the market.

28

OPEN BANKING

lifestyle-related services. Small merchants prefer cash, for cultural and privacy reasons, so digital must bring positive external benefits that are much more valuable than simple cash replacement.

Digital payments need to be a gateway to formal financial products and services. The more formal finance that can be provided to an SMME, the greater the opportunity to grow the business and contribute to wealth creation, jobs and a mutually beneficial relationship between the enterprise and formal finance. As these businesses are enriched by formal Regulation and supervisory guidance are important elements in the development of the Open Banking world. Big banks and the ‘winner takes all’ culture may not be consistent with Open Banking principles, so some regulatory ‘carrot and stick’ incentives may be required to create a more level playing field, breaking up the established legacy arrangements that Open Banking aims to disrupt.

But giving customers the option of providing access to their accounts to third-party fintech, in particular for digital payments, is a powerful market demand-led intervention that can generate more innovation and competition as well as a better end-user experience.

finance they grow and, in turn, increase the total addressable market for financial services.

Open Banking with four-party digital mobile merchant payments operating off the card rails, and unaffected by the costs, physical limitations and shallow penetration of legacy cards, is an important strategy to advance digital transformation and real financial inclusion of the informal sector in the formal economy. This will provide more people with access to the essential financial products and services they need to develop their business and personal potential and, by doing so, unlock the potential of the human capital of the informal economy.

Established banks can choose to either be disrupted by new players or they can align with fintech to bring their customers a richer, more valuable, payment experience while creating deeper banking relationships for both customers and merchants.

This is incredibly important in emerging markets where financial inclusion has been focused almost exclusively on the consumer. In Africa, 50% or more of GDP and employment come from the informal sector - traders, artisans, producers - and through innovation that is completely unseen by the formal financial sector.

The digital transparency of small, medium and micro-enterprise (SMME) cash flow, coupled with track record data from suppliers and other sources, can be used to build a risk profile and create effective demand for more enriched financial services such

About Bluecode: Bluecode is a mobile payment technology, combining cashless payments via smartphones with value-added services and enabling payments with merchant and banking apps alike. While providing a secure, frictionless e commerce payment where no customer data is compromised because there is no customer data within the transaction.

Founded in Europe, Bluecode has now expanded into Africa. Bluecode Africa is taking mobile payments into markets where its value as a technology payment service and scheme can make a significant difference for retailers, SMMEs and in the everyday lives of consumers. Bluecode Africa is focused on providing technology to facilitate safe payments where no customer data is compromised, to help grow business and provide digital transparency, For more information: www.bluecodeafrica.com or email the Africa team at info@bluecodeafrica.com.

as insurance, savings, transactional banking, and 29

COVER FEATURE

Digital Finance

Practitioners Association of

ZIMBABWE

Ushering in a new Zimbabwe through digital transformations.

We have heard, it has been said and we have said it, the world is becoming a global village.

In simple terms it means the entire world is becoming more interconnected by the day using digital technologies. The questions that we have often asked ourselves as an association are; how can we be part of the global village when our own villages are not yet part of digital Zimbabwe?

How can we be part of the global financial village when citizens can not send or can not afford to send money across financial services providers?

How can we be part of the global village when we are still using static identity data to know your customer registrations? What about those without national identity cards or any form of national registration? How can we be part of the global financial village when our financial service providers are still competing where they must complement e.g., fraud monitoring and reporting systems. These are some of the questions that we ask ourselves as an association.

30

COVER FEATURE

We seek to work with all stakeholders in the country

our members is either a student, alumni with the

to ensure that the digital transformation journey

DFI or they are just members of the public who

is shortened thus we are ready to join the rest of

are passionate about digital financial inclusion in

the world digitally without exporting or importing

particular and digital transformations in general. Our

risks. African Continental Free Trade Area (AfCFTA),

secretariat includes leaders in different sectors who

COMESA Business Council and Southern Africa

are passionate about positive change in Zimbabwe

Development Community (SADC) are working on

and are biased towards digital solutions as the new

solutions to ensure instant and inclusive retail

standard in terms of efficiency in economies. We

payments. Again, we ask, are our Micro Small and

have leaders in the following sectors within our

Medium Enterprises (MSMEs) ready for these

membership; Fintech and Techfin, Regtech and

opportunities to trade regionally and be paid

Suptech, Edutech, Alternative finance, Agtech,

instantly? Can regional interoperability work before

healthtech and Insutech.

local interoperability?

Like partners, we track our journey and progress in

Digital Finance Practitioners Association of Zimbabwe

these sectors by following set structures and targets

(DFPAZ), is a member-based association of like-

that we have set for ourselves, from reading research

minded people from across the intellectual and

articles to hosting webinars. We also critically look

career divide. We have members who studied African

at events happening in our environment and analyze

languages to become computer scientists. What brings

them, with a special focus on their impact on Bottom

us together is the passion for digital transformations.

of the Pyramid (BoP) - short term and long term.

We are working on ensuring that we accommodate

We appreciate that financial inclusion is of national

scholars from early childhood learning to university

interest, as highlighted in the recent Monetary Policy

all with the aim to digitally transform Zimbabwe.

Statement’s “measures to address deficiencies

We are passionate about transforming the villages in Zimbabwe to be part of the national economy, to becoming participants in the global village - not just spectators. Among other things, our aim is to ensure that digital finance is sustainable, thus it does not

in mobile banking”. Given the complexities and misconceptions around the regulatory pronouncements, we appreciate the role the media plays in informing the public, the digital financial inclusion space as well as the economy as a whole.

hurt the poor that it is intended to serve. We also aim to ensure that we magnify the impact of digital finance on the community as well as on economic development to ensure that policy makers are well aware so they make informed decisions.

As an association we are concerned about the numbers of our citizens that are affected by old age poverty due to the lack of micro-insurance and micro-pension products. We are worried about our citizens who are financially illiterate and are left out in the greater scheme of financial services. We promote the financial sector deepening thus making markets work for the poor.

DFPAZ is affiliated to the Digital Frontiers Institute (DFI) and Africa Fintech Network (AFN). We started off as a Community of Practice (CoP) for students

We appreciate the role that the Digital Banker Africa plays in changing the structural imbalances in financial services by ensuring that CEOs appreciate the new developments in this market.

The poor are bankable but it takes innovative CEOs to appreciate this. To achieve the global village agenda, we cannot afford techphobic CEOs or leaders.

who were enrolled by DFI since 2017. It was formally registered as a trust in March of 2020. Each of 31

COVER FEATURE

Our students are well equipped when it comes to Science, Technology, Engineering, and Mathematics (STEM) subjects, but not much is known about Financial Literacy, Entrepreneurship & Career Education (FLEC) subjects. We intend to engage with the relevant ministries as well as digital solution providers to ensure this gap is reduced and at best closed.

In general, our association has a vested interest in development economics across all sectors, however we put more effort on the unbanked under-banked and unhappily banked at the BoP. Due to the covid 19 pandemic our travelling has been limited and we have continued to advocate for digital financial inclusion through webinars, some of our webinars has attracted audience from as far as china and Russia and the USA and these are mostly Zimbabweans in the diaspora who feel there is now need for a digital Zimbabwe project.

We have celebrated women in Zimbabwe who have spent time and effort in ensuring Zimbabwe is financially included. We have celebrated women who have ensured that the MSMEs still have access to financial services especially through the pandemic. Because of the pandemic MSMEs were facing

We believe financial literacy is the bridge between financial inclusion and sustainable financial inclusion. We are convinced that financial inclusion is the oil in the economic development engine, never noticed but without it the economy will not perform.

We are young, innovative and disruptive, we intend to unite digital transformation advocates, leaders, organizations and stakeholders to exchange information and ideas, promote and support creation of innovative technologies and deployment across and beyond Zimbabwe. The association also serves as a platform for advocacy and coordinated regulatory interactions.

Our Vision is to create an efficient economy through digital financial inclusion, financial literacy and financial deepening for every

challenges in accessing credit,

Zimbabwean home and beyond.

insurance savings and pension

Our Mission is to promote the development of a digital economy,

products but there are innovative

to empower and impart knowledge to our people so we can realize our

women that have come up with

financial capabilities and freedoms through innovative, convenient

affordable solutions to assist the

and disruptive localized solutions.

MSMEs. We have celebrated them to magnify the importance of their work in the digital economy.

Gerald Munyaradzi Nyakwawa is the Chief Association Executive of DFPAZ and can be reached on gerald.nyakwawa@dfpaz.co.zw

COVER FEATURE | INTERVIEW

33

TOP 10 WOMEN

TOP 10 WOMEN

TO WATCH IN

BANKING

FINANCE ANNOUNCED

TOP 10 WOMEN

T

he Angaza Awards: Women to Watch in Banking & Finance program has announced the list of Top 10 women who are steering and shaping the financial services sector. The list was compiled following a four-month entry period which saw professionals from Kenya, Rwanda, South Sudan, Tanzania and Uganda submit applications. The Kenyan Wallstreet, a financial news media company and Kaleidoscope Consultants partnered together on the Awards in an effort to raise awareness of seasoned women who are shaping and influencing the sector through their organizations.

The Angaza Award criteria included an assessment of the applicants’ area of responsibility and contribution to firm performance.

Scores were also awarded for achievement that transcended the institution and resulted in sector and, or community shared value creation. Professionals in Banking, Capital Markets, Insurance, Investment Banking, Fintech, Fund Management, Microfinance, and

Savings and Credit Cooperatives

The Angaza Awards Judges Panel

(SACCOs) were invited to submit

was constituted by Prof. Tabitha

their applications or nominations

Kiriti of the University of

via the Kenyan Wallstreet Award

Nairobi School of Economics; Ms.

Web page.

Catherine Musakali, co-founder of Women on Boards Network; Ms.

“These women are quietly, behind

Ester Ndeti, Executive Director

the scenes, creating an impact

of East Africa Venture Capital

for their organizations and in

Association; Dr. Mary

turn shaping the financial sector.

Okello, co-founder of Kenya

They have certainly earned the

Women Finance Trust; Mr. Luke

recognition and we congratulate

Ombara, Capital Markets Authority

them for their accomplishments,”

Director of Regulatory Affairs;

said Nuru Mugambi, who chaired

and Ms. Phyllis Wakiaga, Chief

the Judges Panel. “I often am asked

Executive of Kenya Association of

‘where are the women,’ when it

Manufacturing.

comes to board appointments.

Considering the financial sector

“The inaugural Angaza Awards is a

employs thousands of women,

testament of how important it is to

we recognize that this list is not

acknowledge the role that women

exhaustive, but it is a start in

play in the banking and financial

showcasing the many women who

services industry. Increasing gender

are ready and able to serve,” she

diversity onboards is associated

said.

with stronger financial outcomes, stability and greater focus on

“Board diversity includes gender,

transparency and ethics.

age, tribe, race, culture and professional backgrounds, and

Regulators, sector businesses and

research and analysis has proven

Fintechs need to improve the

that firm performance improves

representation of women in

with a well-constituted and diverse

leadership positions. As new market

board. Moreover, financial sector

entrants, Fintechs should be

experience is an advantageous

encouraged to take a lead in this

skillset for any board.” added

area,” said Eric Asuma, the Co-

Mugambi. “We need to move away

Founder and CEO at Kenyan

from board recruitment practices

Wallstreet.

that entrench cronyism, tribalism and nepotism. Listed companies in

The Award Secretariat also

Africa are encouraged to continue

announced that the 2021 Award will

making an effort to recruit

invite applications from across

transparently and from the many

Africa with the Call for Entry period

databases that will help introduce

opening in October 2021.

boards to new names and fresh

Follow @AngazaAwards on

perspectives. The Angaza list is a

Twitter for updates and more

good place to start!”

information on the award program.

TOP 10 WOMEN

TOP 10 WOMEN TO WATCH IN BANKING AND FINANCE (2020)

MARY WAMAE

COUNTRY: KENYA

SECTOR: BANKING AGE: 52

Mary serves as Group Executive Director for Equity Group Holdings Plc and a Non-Executive Director in the Boards of Finserve Africa Ltd, Equity Group Foundation, Equity Investment Bank Ltd, Equity Insurance Agency Ltd, and Equity Subsidiaries (Kenya, Uganda, Rwanda, Tanzania and Congo).

In 2019 she led the Group’s acquisition of BCDC in DRC and the subsequent merger with Equity Bank Congo to enable the bank to attain a combined balance sheet of Ksh. 2.5 billion, leading to Equity Group crossing the Ksh. 13 Trillion balance sheet milestone.

In addition to bank leadership, she is involved in mentorship of young ladies, career mentorship of professionals, scholarship sponsorships for bright but needy scholars and environmental conservation. In March 2020, she pioneered the launch of a staff empowerment program, EQUIP, that aims to empower and mentor staff to advance in their careers, practice work-life balance and generally expose them to industry leaders and content that will help them network and grow in their careers.

She also sponsors more than 20 students and five orphans to pursue their high school, college and university education. In 2020, she individually championed the construction of a classroom block and equipped a library for BL TEZZA School for the hearing-impaired students in Nyatike Migori County.

TOP 10 WOMEN

CATHERINE KARIMI

LINA HIGIRO

COUNTRY: RWANDA SECTOR: BANKING

COUNTRY: KENYA

AGE: 49

SECTOR: INSURANCE AGE: 47

For the past four years, Catherine has been the Chief

Lina serves as Chief Executive Officer of NCBA Bank

Executive Officer of APA Life Assurance Company.

PLC, one of the fastest growing banks in Rwanda.

By championing the development of such innovative

A key approach to her leadership is to foster

products as Upendo, the first end-to-end digital

institutional growth through digital-led efficiency

microlife product, the firm has witnessed impressive

and staff engagement. In her first years as CEO, Lina

performance with revenue increasing 43 percent and

consolidated operations, revised the business model

assets by approximately 50 percent. Equivalently, the

and introduced new income and customer segments,

APA Life Fund has grown by over Ksh 2 billion under

resulting in a remarkable growth in operating income

her tenure.

by 141 percent, driven by a 163 percent growth of the loan portfolio.

She has been recognized as a leader who fosters a customer-focused environment, delivering products

She has delivered five key digitization and efficiency

and services that exceed customers’ expectations.

projects, which attracted new customers and grew

Overseeing company operations to ensure efficiency,

the bank’s deposit base by 99 percent ($21m to

quality service and cost effective management of

$41m) between 2019 and 2020; and mobile money

resources, Catherine’s continuous improvement

customer base to represent 80 percent of Rwanda’s

approach has anchored the firm’s sustainable growth.

active mobile money users. Lina’s leadership style has resulted in a positive culture within the bank,

Catherine is active in the community. She supports

which is rated the highest in the NCBA group in terms

Nthimbiri Primary School as an alumni member and

of employee satisfaction.

has contributed individually towards the provision of clean piped water, and new and better toilets. The

Prior to joining NCBA, she served as Chief Operating

school has also been assisted during the Coronavirus

Officer (COO) at AB Bank Rwanda, where she helped

(COVID-19) pandemic through provision of soap and

streamline operations resulting in a 150 percent

masks. She also serves on the management team of a

growth in non-funded income and 235 percent

community church where she supported digitization

growth in payment transaction volumes.

in the wake of COVID and helped mobilize food and other basic needs for church members who were

In 2019, she set up a “Fee Gap Fund” dubbed “LIK

impacted through loss of businesses and jobs as a

Fund” to support university students with housing,

result of the pandemic.

food, fees and transport, and in January 2021 she co-initiated the introduction of a mental health Employee Assistance Program (EAP) for the banking sector which will be launched in May.

TOP 10 WOMEN

ELIZABETH WASUNNA OCHWA

JOANITA JAGGWE

COUNTRY: SOUTH SUDAN

COUNTRY: KENYA

SECTOR: BANKING

SECTOR: BANKING

AGE: 41

AGE: 48 Elizabeth is Director of Business Banking at Absa Bank

As Country Head of Risk and Compliance at KCB South

Kenya Plc. She joined Absa in 2018 and was tasked with

Sudan, Joanita has improved the bank’s operations

developing and executing a workable growth strategy.

by introducing risk management structures and

Within a year, she was able to identify opportunities of

frameworks that have stymied losses. Through her

growth and areas that required re-organization and

efforts, the bank’s write-offs have drastically reduced

re-building. In 2019, the bank’s asset book grew by

with zero losses due to fraud and full compensation

28 percent, customer deposit base was up 6 percent

to affected customers, averting all potential penalties

and for the first time, the Business Banking Segment

and reputational damage costs. She has implemented

revenue recorded a positive growth. Despite the

robust Anti-Money Laundering (AML)and Counter-

challenging business environment in 2020, her division

Terrorist Financing (CFT) systems for rigorous

recorded a 10 percent growth in earnings.

monitoring of customer profiles and transactions in South Sudan, which is a “hotspot” area for U.S.

One of her key initiatives was to make Absa (formerly

and UN sanctions and embargoes; this has created a

Barclays) more friendly to small local businesses.

competitive advantage for the bank and enhanced

As such, she led the review of lending policies and

confidence and continued business with

introduction of new unsecured products. This new

international partners.

proposition was anchored For these interventions, KCB South Sudan is on a campaign dubbed “Wezesha Biashara.” Elizabeth

recognized for attaining the highest Enterprise-Wide

is a key supporter of women entrepreneurs and a key

Risk Management Index Score within KCB Group. She

believer in women’s economic empowerment. Under

also has been instrumental in building an effective

her steer, the bank launched a Ksh 10 Billion fund for

compliance and risk management culture which has

women entrepreneurs to grow their businesses and

reinforced system efforts to minimize operational

enhance their management skills.

errors and/or failures and promote operational efficiency.

She also has been instrumental in building and establishing lasting collaborative engagements with

Previously, she served as Governance and Control

key stakeholders, including Kenya National Chamber

Manager at ABSA Bank Uganda Ltd., where she

of Commerce and Industry (KNCCI), Kenya Association

contributed to firm performance by sealing income

on Manufactures (KAM), International Trade Centre

leakages through fraud detection and prevention that

SHE Trades, and Kenya Private Sector Alliance (KEPSA).

reduced the bank’s operational loss expense from 20 percent to 6 percent of Profit Before Tax.

Over the years, Elizabeth has supported Wema Rehabilitation Center for Street Children in Mombasa;

Within the community, Joanita supports the Juba

mentorship of students at Kenya High School; and

Teaching and Referral Hospital, where she has

Marera SDA Church in sponsoring children in need.

organized and secured funding to procure medical equipment, including delivery beds for expectant mothers, mattresses and wheelchairs.

TOP 10 WOMEN

MILLICENT OMUKAGA

COUNTRY: KENYA

SECTOR: DEVELOPMENT FINANCE AGE: 41

EMMANUELLA NZAHABONIMANA

COUNTRY: RWANDA SECTOR: BANKING AGE: 36

Millicent serves as the Advisor, Women

Emmanuella is Head of Information Technology at

Empowerment Policy and Affirmative

KCB Rwanda, where she provides vision and leadership

Finance at the Office of the President, African

for developing and implementing strategic initiatives.

Development Bank (AfDB). At the Bank, she

She is responsible for directing the planning and

has guided transformative gender finance by

implementation of IT systems in support of business

strengthening gender mainstreaming across

operations in order to improve cost effectiveness,

AfDB operations and strategies while also

service quality, and business development. As such, she

addressing the Bank’s internal transformation

is accountable for daily operations of technology and

to make it a more supportive, gender-

provides ongoing systems and cybersecurity service to

responsive institution that values its female

internal staff, as well as, other stakeholders.

and male staff equally.

Some of her achievements include the successful delivery She supported the establishment of the Gender

of a USD 3 million project for a new infrastructure,

Equality Trust Fund, the first thematic fund

covering the core banking system and the bank’s primary

on gender in the AfDB history. She also has

and disaster recovery data centers. This project was

championed a Risk Share Mechanism facility,

completed with a 10 percent cost saving and within

a transaction seeking to unlock up to USD 2

timelines, despite challenging requirements.

billion in credit; this is the largest effort ever to bridge the gap in access to finance for women in

A believer in employee development, she has mentored

Africa’s history.

and trained junior staff, including three employees who have advanced to become managers. When she joined

Alongside the finance space, she consistently

the bank’s IT department, she was the only female.

contributes to the national and regional gender

Over time, she has influenced a more diverse culture

machinery for empowerment of women and

which has attracted more female professionals; the IT

girls through Kenya Girl Guides Association,

department now comprises 38 percent female and 62

Institute of Certified Public Accountants in

percent male employees. She recognizes that this is not

Kenya, Association of Women Accountants in

gender parity and continues to work towards that goal.

Kenya and the National Gender Sector Working Group. She is also a regional advocate for

In addition to mentoring women within the bank,

financial inclusion through the African Women

Emmanuella is a member of Techwomen Rwanda,

Leadership Network (AWLN). She previously

which is an initiative of the U.S Department of State

served as the Chief Operations Officer and

to empower, connect and support the next generation

Head of Business at the Agricultural Finance

of women leaders in STEM. Through the program, she

Corporation, and General Manager at

mentors and trains students in local schools.

Kenya Women Microfinance Bank.

TOP 10 WOMEN

JUDITH ODHIAMBO

POOJA BHATT

COUNTRY: KENYA

COUNTRY: KENYA

SECTOR: BANKING

SECTOR: INSURANCE

AGE: 48

AGE: 32

Judith is the KCB Group Head of Corporate Affairs

Pooja is the Co-Founder of two profitable companies:

and this role involves managing brand reputation,

QuantaRisk, an insurance consulting firm and

stakeholder engagement, internal and external

QuantaInsure, an insurance agency which sells a

strategic communications, and sustainability and

variety of insurance products from multiple companies

responsible banking. She has spearheaded the

digitally via mobile application technology. The

bank’s sustainability initiatives that in 2020 resulted

platform enables customers to buy a policy or make a

in accreditation with the global Green Climate

claim within minutes. As a founding team member,

Fund (GCF), which will see the bank access up to

she contributes to business strategy and development,

USD 250 million in funding for onward lending to

project management and client relations. As a qualified

clients aligned to climate change mitigation and

actuary and insurance consultant, Pooja leads

adaptation. KCB is the first bank in the country to be

technical aspects of client projects. Her clients include

accredited. Judith’s efforts toward making KCB an

businesses with annual turnover of more than Ksh

environmentally responsible bank were underpinned

20 billion. She also supports clients with insurance

in 2014 when she helped incorporate Environmental

training and awareness.

and Social Governance (ESG) requirements into the bank’s credit processes.

Prior to founding her companies, Pooja worked as an actuary at XL Catlin (UK) until 2018. While at the firm

Judith has honed her leadership capability at the

she helped digitize its insurance reserving process.

highest corporate level, working with various KCB

The USD 1 million project included working with

Boards and Committees, including by serving as a

interdepartmental teams such as Actuarial, Finance,

member of the KCB Executive Committee (EXCO),

Claims, IT, as well as, offices across the globe in order

KCB Wellness Committee, and KCB Staff Recognition

to understand their current processes and future

Committee. She previously was a Board Director

requirements.

of KCB Insurance for three years. In addition, she serves on the Kenya Bankers Association (KBA)

Pooja is passionate about women in business, youth

Sustainable Finance Initiative (SFI) Committee,

mentoring, and philanthropy. Since returning to Kenya

United Nations Environmental Program Financial

from the United Kingdom in 2018, she has helped

Initiative (UNEP Fi) Committee, and Membership

promote opportunities for women in business through

Committee at Women in Boards (WOB).

New Faces New Voices; and has helped raise donations to distribute much-needed items to schools and

Previously, she served as Public Relations Manager at Kenya Railways Corporation, where she successfully designed and executed programs to promote the privatization of Kenya Railways, in addition to improving the outlook of the Nairobi Railway Museum and its publications and overseeing its opening to the public.

children’s homes.

TOP 10 WOMEN

ROSEMARY NGURE

COUNTRY: KENYA

SECTOR: PRIVATE EQUITY AGE: 47

Rosemary is ESG & Impact Manager at Catalyst

performance, reduction in loss time injuries,

Principal Partners. She has spearheaded

gender considerations, improved governance

enhanced Environmental, Social & Governance

structures, and prevented sanctions and penalties

(ESG) risk management practices, which have

through strict adherence to compliance policies.

contributed to a robust risk assessment of non financial parameters that contribute to financial

Rosemary previously served as Legal Counsel to

performance through improved governance

United States International University (USIU),

structures, reduced costs, improved efficiency,

where she successfully set up the office of

and improved stakeholder engagement,

the Legal Counsel; established a Board and

among others.

Management Council Secretariat; and oversaw the setting up of an Endowment Fund for USIU. She

She has been responsible for monitoring business

earlier served as Legal Officer at Jubilee Insurance

integrity practices, corporate and legal affairs,

Company Limited and Nairobi Securities

compliance management and reporting; as

Exchange.

well as, stakeholder relations. In addition, she leads monitoring and support to investment

In her spare time, she volunteers as a mentor

professionals and ensures that internal policies

and coach. She has mentored four ladies through

and procedures, laws, regulations and ethical

university and into employment. She also serves

standards are strictly adhered to by the Fund,

as special advisor to EGF, an impact fund seeking

Manager and Investee companies. She is Secretary

to raise USD 100 million.

to the Investors Advisory Board and served as Secretary to the Investment Committee.

Her achievements include developing and managing ESG frameworks for two private equity funds, representing USD 300 million in assets under management and more than 10 local and international investors. In addition, she is responsible for incorporating ESG aspects across 12 companies spanning Fast Moving Consumer Goods (FMCG), pharmaceutical sector, printing and office automation, heavy equipment leasing, agribusiness and financial institutions.

Her efforts have resulted in 100 percent wastewater treatment and recycling in some portfolio companies, improved health and safety

Investing in Africa’s local and global tech potential W

ith the rate of

Taking a broad view into the near

technology adoption

future; it seems unlikely that the

continuing to accelerate,

and Africa steadily producing a wave of technology giants, with

Ian Lessem Managing Partner HAVAÍC

Nigeria’s Flutterwave becoming

greatest contributions to and innovations in biotech or space travel will emerge from Africa (although I would be thrilled to be

Africa’s most recent tech Unicorn,

at the prospects coming out of the

proven wrong here). However, when

now truly is an incredible time to

VC space in African markets which

it comes to finding commercial

support and invest in local, African

are truly world class opportunities

and innovative solutions to local

Venture Capital (VC).

with local and global potential.

challenges with global relevance, African founders are really paving

As the managing partner of an

At HAVAÍC, we focus on local

the way, and proving not only that

African focused VC investment

African technology-based

they can scale, but that they can

manager, where we look to invest

investments. A common question

also scale quickly, both locally

in opportunities that significantly

that comes our way is, “How can a

and abroad.

outperform the traditional

Cape Town start-up compete with

investment market, I am constantly

a start-up in Palo Alto, Singapore,

As a VC investor we place great

comparing the VC opportunities

London or Tel Aviv? Given the

emphasis on supporting and

that come past my desk with

resources that those businesses

investing in startups with

other investments which include a

have at their disposal, surely

commercial and globally relevant

myriad of asset classes and sectors

African startups can’t compete?”

solutions, where the founders and

available both locally and abroad.

To which I reply, “They compete

their technology have a ‘right to

Doing this day in and day out, I can

out of necessity; as necessity is the

play’, and their business provides

honestly say just how excited I am

mother of invention.”

real-world solutions that can scale

42

right emphasis on being financially

technology companies within

viable from an early stage. Out

the HAVAÍC portfolio, which

of sheer necessity, coupled with

collectively service close to half

scarcity of funding, African

a million customers in over 180

founders need to self-fund and

countries across the globe.

bootstrap for as long as possible.

Because of this, we see the priorities

When we first invested in AURA,

and focus of founders in achieving

now one of our more mature

a commercially successful business

investments, the company only had

from the get-go. Through our early

one commercial contract. Today,

stage investing lens, the premise

they provide access to on-demand

that the cream rises to the top

private security and emergency

certainly holds true.

services through a Johannesburg developed technology platform,

seamlessly across the globe on the back of proprietary technology.

In developed economy cities and the tech hubs mentioned above, there is a significant supply of available capital for startups and entrepreneurs. The Softbank Vision Fund has a staggering $100 billion to invest into VC in these markets, and with many other multi-billiondollar VC funds in Silicon Valley and other cities, scarcity of financial resources is not a limiter on the path to success for start-ups in these geographies.

By contrast, in Africa there is a shortage of affordable, appropriate, unrestricted and smart capital.

This means only a few of the most promising businesses and entrepreneurs tend to be funded, and most businesses we assess and engage with have already placed the

On top of being commercially viable, HAVAÍC searches for startups with global scalability. When we look at a tech business, we ask the question, “What does this business have that a billion dollar, US headquartered, VC funded business does not have?” But perhaps an even more interesting question is “Why would a multinational company contract with a startup from the bottom tip of Africa?” Here again, necessity becomes the mother of invention.

Another question linked to this is, “What right does the startup have to compete?”

To best answer these questions, it’s worth turning our attention to some of the exciting high growth

servicing local and international clients including global tech giants like Uber. AURA’s solution was born out of the necessity of addressing high crime rates in South Africa – far more prevalent and invasive in our own environment than it is in the United States. South Africans, and in this instance the AURA founders we have backed, have innovated, experimented and succeeded in the global SecurityTech environment, and have undoubtedly earned their right to play. This outcome should hardly come as a surprise, as the most innovative solutions in private and corporate security have always come out of places and situations that are most impacted by their unsafe environments and high incidences of crime.

A brilliant second example is hearX, a HealthTech platform developed in Pretoria, which is following on the uniquely South African health innovation precedent first set by Dr Christiaan Barnard in 1967 when he performed the world’s first successful heart transplant.

Together with the World Health Organisation hearX have used their proprietary, affordable, and 43

accessible audiology technology

head-on and out of necessity

In a world where investors are spoilt

to perform over 1 million hearing

become subject matter experts.

for choice and can invest anywhere,

tests in over 80 countries across

Examples where innovative African

unlocking the potential of VC as an

the globe. With limited access

founded solutions can successfully

investment class in Africa offers

to audiology solutions in Africa,

arise are in support services for

investors the opportunity not only

hearX is another prime example of

public and private healthcare,

to invest in real-world businesses

innovation born out of necessity,

financial services for underbanked

solving real-world challenges,

which when coupled with

communities, delivery and digital

but to invest in a sector that offers

technology, can scale both locally

communication services where

undeniable growth prospects.

and internationally. This global

population growth outstrips

Importantly, at HAVAÍC, we

scalability is evidenced by hearX’s

infrastructure growth, to name just

invest into local African teams; in

landmark distribution agreement

a few. These solutions, borne out of

businesses that have local expenses

with Walgreens, a leading US

necessity, create efficiencies, new

that are often significantly less

pharmacy chain, to roll out their AI

products and opportunities that

than in developed markets; that

powered hearing aid solution Lexie,

can be applied and used in both

are either invoicing in ‘dollars’ or

in 39 States in over 10,000 stores.

developing and developed markets.

have the potential to attract interest from foreign investors and trade

A third example within HAVAÍC’s portfolio and tying in to the “flutter” of investments in the Nigerian fintech space is Kuda, a digital bank built in a similar mold to leading international virtual banks such as Monza but catering perfectly to the youthful and tech savvy population of Nigeria that just so happens to have some of the highest mobile penetration rates in the world. Kuda recently closed a $25 million Series A funding round led by New York-based VC Valar Ventures. With a large portion of Nigeria’s 200 million plus population not having access to traditional banking services, out-of-necessity solutions like Kuda are crucial in the drive to create financial inclusion. Coupled with scalable technology, this is a very appealing proposition for international investors with smart money looking to enter into new high growth markets.

The same core principle applies to many other sectors in Africa, where local challenges are so pervasive that innovators simply have no choice but to tackle them 44

buyers looking to gain new market

It is clear that Africa has scalable products that can grow both locally and abroad, as long as they are underpinned by commercially viable business models, have been nurtured, tested and grown in Africa with a global mindset, and importantly the founders are experts in their field. All this in combination with scalable and cuttingedge proprietary technology, gives them the ‘right-to-play’ and the potential to scale domestically and internationally.

share and products.

Access to all of this is possible without having to journey across the globe in search of the next big thing as it is already right here on our doorstep. The solid organising principle of innovating out of necessity is why the continent is well-placed to continue producing more and more tech enabled Unicorns in the years to come, and why we at HAVAÍC are so excited to be supporting and investing in Africa’s immense local and global potential.

give yourself the power to be more

45

Modernisation of

Payment Systems P

ayments worldwide are undergoing a

Trevor Cracknell Head of product Finteq

revolution where

digitisation, interoperability

As financial institutions grow,

and modernisation are

mature or even transform over

currently the key topics in

time, systems and processes

every financial institution’s

become more fragmented

business and investment

with business, technology and

strategies. Ever increasing

operational silos. As a result of

regulatory control, rapid

this, financial institutions find

technology advancement and

themselves with multiple payment

highly competitive business

capabilities performing similar,

environments dictate that

or even the same functions across

financial institutions need to be

multiple channels and products.

more agile and scalable to meet

This invariably leads to business-

both legislative and the modern

critical issues such as high system

customer’s requirements. As

maintenance costs, major outlay

a result of this, the domestic

and risk to implement changes

and international payment

or new lines of business. Apart

environment has become a

from this it leads to an inability to

strategic business driver to

manage payment processing and

most financial institutions.

risk efficiently across an institution

However, the ability to deliver

as a whole and, in most cases

ongoing, cost-effective, value-

results in duplicate functionality

adding and sustainable changes

throughout the value chain.

to payments architecture without introducing major risk

Modernisation is a relatively

remains a key challenge.

new concept to the payments environment, where in the past

46

the focus has been primarily on regulation, stability and security with more traditional participants such as central banks, retail and/or corporate banks, clearing houses, mobile operators and other large financial institutions. The role of digitisation in the modernisation process introduces completely new and disruptive products and services that threaten the existing payment eco systems by reducing their relevance or by replacing them entirely. These are often driven by new market entrants, Fintechs and other payment solution providers that were never previously the drivers that determined the strategic direction of national and international payment systems.

This has created a significant change in focus for regulators, competition and ultimately the value and service delivery to the users.

In order to fully understand the landscape, the drivers of this revolution need to be understood, why this trend has started and where it is ultimately heading.

Drivers of Change There are many parts that make up the whole in the sense that there

•

number of drivers that co-exist to can be loosely categorised by the

•

outcomes being pursued as well as the levels of impact experienced as a result of the modernisation agenda.

Regulation and Policy Drivers •

Implementation of updated or new legislation and policies

•

payments systems in order to

•

financial institutions.

Implementation of Open

customer for more consistent and predictable payment

participants, products, and

services that offer more product

services into markets.

features and benefits.

•

•

Access to information and payment systems has increased the need for payment solution

to the COVID-19 pandemic.

providers to implement simpler

The rapid adoption of digital

and needs.

services.

Modelling for Modernisation Successful modernisation initiatives around the world have

•

Decommissioning, replacement

been those that have extended their

or retirement of legacy systems

focus beyond current business and

that are expensive to change

operating models, and where there

and struggle to meet regulatory

has been a clear understanding of

requirements.

the impacts, risks and constraints associated with the new or

•

better identify and respond to fraud, money-laundering, and other criminal activities.

International Standards

to extend the standardisation

•

promote digitisation to respond

as well as generational

to payment systems.

interoperability and scalability

capability.

The global need to enhance and

solutions due to exposure to

opportunities and overall access

standard that promotes

competition into domestic

and more intuitive products and

competition, new growth

Adoption of the ISO 20022

Introduction of international

overall understanding of

differences in both knowledge

international best practice to

•

Payment modernisation

Implementation of policies

Alignment with domestic and

Demands of the modern

for the introduction of new

new and different technologies

benefits such as increased

•

Banking standards that allow

participants.

efficiencies that promote key

•

constraints or dependencies on

programmes.

technologies and Fintechs.

that drive innovation and

•

modernisation and integration

trends driven by disruptive

manage risk and compliance of

•

their cash flow with fewer

markets with advanced product

Introduction of regulatory controls into existing and new

Implementation of regional

Advancement

goals such as flexibility, and inclusivity.

a greater desire to own their

Legacy Systems and Technology

to support modernisation cooperability, interoperability

the end customer who have

entire value chain.

finances and be able to manage

is no single driver, but rather a create the desire to change. These

of payment systems across the

The introduction of real-

improved payment environments.

time payment solutions that

Sound design principles should be

fundamentally impact the

followed in the technical, business,

payments ecosystem and

and operating domains in order to

offer 24/7/365 processing

achieve the benefits of participating

opportunities.

in a modernised payment system.

Most modern payment systems

The Modern Competitor and

share similar features, which

Customer

have somewhat become these inherent underlying principles

•

Greater autonomy needs of

that government, regulators, 47

Trusted and Secure

Adaptable and Flexible

Cost Effective and Responsive to Demand

Reliable and Predictable

associations, financial institutions,

•

Ease of Access and Use

Scalable and Interoperable

The impact of existing and

Competitve and Innvoative

•

The decision to replace or

and other participants have used to

indirect legislation that may

co-exist with legacy systems

define their products and services.

create inherent constraints.

changes the operational complexity and cost models.

When modelling for modernisation,

•

The readiness of consumer

careful consideration should be

groups or segments to adopt

All principles and considerations

paid to the business context to

modernisation.

are subject to the driver of the

ensure that the strategy followed is in alignment with the capability

change itself. In most instances •

The capability to implement

worldwide, the process has been

to operate in the payment

Cloud-based strategies to lower

mandated or triggered by inclusive

environment. Particular attention

costs and improve access to

regulatory initiatives. This has led

should be added to the enablers

markets and users.

to a more cooperative and inclusive

that play an important role in the decision-making and business case

model where industry participants The direct impact of more

have been engaged to formulate

for modernising. Some of these

comprehensive and rich data

and implement the modernisation

enablers include:

that adds new challenges to

journey. Where this is followed

the transmission, processing,

by a more singular approach,

The capability to digitise and

storage and scale of IT

it has proven more difficult to

the impact this has on existing

operations.

implement however, and more

•

lines of business.

48

•

disruptive in nature. It is therefore

of great importance to design for the journey with an

success and are more conservative in nature, attributed

understanding of how it will be implemented.

to the complexity of the existing systems and the

Embracing Modernisation

readiness of the impacted end users and consumers to adopt the change. This approach entails either the parallel or co-existence of the legacy and modernised

Although the main advocates for the revolution

payment systems. The implementation is categorised

towards modernisation are the financial and non-

as a lower risk, albeit higher cost, model where

financial institutions, focus cannot be detected on the

consumers are migrated to the modernised system

end user or consumer to be ready for the change. A

over time. Models have shown that there needs to be an

large portion of this readiness depends on the chosen

ultimate goal of completing the migration, otherwise

implementation and delivery model, which can result

the user adoption may slow the process to a grinding

in a critical impact on these stakeholders. Various

halt.

delivery models have been implemented with different levels of success. The success of which has largely

Regardless of the chosen approach, careful planning

been attributed to how the journey was delivered and

should be applied to ensure the following adoption

how the solutions have been adopted by end users and

success factors are catered for:

consumers. Two typical models have been utilised, however, alternative strategies are emerging due to the

•

growing availability of information:

Participants of the modernisation journey should be included as early as possible. As a sound change management practice, the earlier the involvement

Regulatory-Led Approach

Identified as the most successful journeys with collaboration of regulators and participants at different stages of the initiatives. Models have included direct engagement with detailed involvement or at a higher-level oversight function. The implementation is typically characterised with a “big-bang” approach where systems and processes are implemented with immediate effect at an agreed and specified time by all participants.

Participant Migration Approach These have been implemented with varying levels of

and participation in the solution, the higher the likelihood of success.

•

Communication should be consistent, clear and understandable. Given the impact to large stakeholder groups, the failure to communicate will invariably create negativity, fear and further constraints to adoption.

•

All stakeholders should be able to interpret what it means to embrace modernisation, how they can be part of the journey and what they need to do to adopt it.

Modernise or risk being left behind…

Modernisation is a trend being followed globally and across all of the different payment domains, schemes and environments. Although payment ecosystems are no strangers to change and have needed to undergo many large-scale initiatives over the past few decades, the changes being driven by modernisation are far-reaching and have major implications to all stakeholders and users. Failure of the organisation to mobilise and start the journey will find themselves struggling to stay relevant, negatively affect customer retention and meet the challenges in a highly competitive payment environment.

49

FINANCIAL REGULATION

IS CAPACITY BUILDING

A NECESSARY REQUIREMENT FOR ENHANCED

AND FORWARD-LOOKING REGULATORY CHANGE?

Disclaimer: The opinions expressed in this publication are those of the author. They do not purport to reflect the opinions or views of Digital Frontiers.

FINANCIAL REGULATION

Nolwazi Hlophe Deputy Director Financial Regulation and Supervision Digital Frontiers

Financial regulation needs to keep in pace with rapidly evolving innovations in the financial sector, whilst aligning them with their mandates. This can be a particularly daunting task for financial regulators as they may have two significant limitations: limited staff resources available to focus on a given topical area and limited capability, i.e., limited technical background, skills and expertise to make appropriate decisions across a variety of regulatory domains. The Covid-19 pandemic has significantly highlighted how these limitations hamper the ability of regulation to be an enabler for market development and innovation. However, due to Covid-19 restrictions, there has

The pace of progress towards

encourage an increased pace of

regulatory change and regulatory

policy and regulatory change,

flexibility isn’t keeping in step

which provides policymakers and

regulators and supervisors.

with innovation. Several capacity-

regulators with some level of

building trainings offered by a

discretion, thereby making these

Can capacity building inform

variety of actors, including Digital

changes flexible and agile to future

regulatory change? Financial

Frontiers Institute (DFI) generally

developments in the industry.

authorities play a leading role

work complementarily. However,

in increasing financial inclusion

despite these efforts, there

globally. However, the lack of

continues to be a divergence in the

capacity to design and implement

type of capacity-building training

enhanced and forward-looking

that is supplied as opposed to the

policy and regulation is often cited

training that is needed by financial

as a key challenge that hampers the

authorities. Consequently, these

goal of global financial inclusion.

opportunities are not tailored to

It is important for financial

policymakers’ context and needs1.

authorities, such as policymakers,

To bridge this gap, it is key for

regulators and supervisors,

capacity-building providers to

to continuously identify their

understand their desired student

changing capacity-building needs

persona and their context to

that are specific to their context.

offer tailored trainings that can

been an increase in uptake of online training, which seeks to increase the capacity of policymakers,

Regulating for innovation is a multi-faceted and multistakeholder endeavour. Financial policies and regulations are key enablers for inclusive digital financial services. Recent innovations include 1 Dalberg Advisors (2019), CGAP Insights: How do policy makers learn and adapt today?, available here. new business models, products and technologies, which have the potential to encourage more people 51

FINANCIAL REGULATION

to use formal financial services2.

have at their disposal appropriately

Through DFI policymakers and

New business models include

for their jurisdiction.

regulators can follow one of these

digital credit, crowdfunding, peerto-peer lending and insurance.

When considering how and if to license these new business models, financial authorities need to identify, understand and prioritize the key risks and opportunities these bring to their jurisdiction.

New products such as instant payments, stablecoins and central bank digital currencies (CBDCs) have significant implications on legal and regulatory frameworks of jurisdictions as well as risks to their monetary sovereignty. Finally, new technologies may be the underlying foundation of the new business models and products, these include cloud computing, application

Capacity-building is the key to unlocking enhanced and advanced regulatory change. However, for capacity-building initiatives to achieve this desired outcome, they need to incorporate accountability frameworks into their participation selection criteria. Furthermore, capacity-building providers can provide scholarships and ensure consistent coordination between participants across different jurisdictions as well as coordination with other capacitybuilding providers and development agencies. Digital Frontiers Institute provides scholarships and has established Communities of

journeys according to their focus area in their institution. DFI seeks to increase technical capability of policymakers, regulators and supervisors such that they understand the new developments in industry, identify and understand the key risks and opportunities of innovations as well as understanding and appropriately using the tools at their disposal. A sound understanding of emerging approaches, through increased technical capability, can help supervisors maximise their limited resources thereby enabling enhanced and forward-looking regulatory change.

World Bank & BIS (2020), Payment

Practice (CoPs), which will ensure

2

that learning continues outside

aspects of financial inclusion in the

technologies and big data analytics.

of the online classroom through

fintech era, available here.

These innovations raise a lot of

coordination and collaboration

questions for policymakers and

nationally, regionally and

regulators, which ultimately

internationally.

programming interfaces (APIs), digital identity, distributed ledger

inform their decisions. A lack of technical capability amongst policymakers and regulators often results in the absence of clear, enabling legal and regulatory frameworks, which is a barrier for financial innovation. This lack of regulatory clarity can be addressed, initially, by equipping regulators with the technical knowledge, which addresses their questions and helps them to develop prudential policies and regulations as well as use innovation facilitators that are relevant to their context.

Furthermore, policymakers and regulators need to understand how to implement the tools that they

52

facilitating effective stakeholder

PAYMENT

Why customers must come first

Dare Ayanwale

Today, it is not uncommon for organisations to focus more on launching a product and forget about customer experience. Also, activities geared towards conducting a solution evaluation after a launch to understand issues experienced by their end-users can at best be an afterthought.

Payment System Specialist Nigeria Inter-Bank Settlement Systems PLC

A plethora of literature exists, alluding to the fact that customers, existing and potential, are integral to the product design and development process. The customer’s engagement early in the design process mitigates the risk of problem-solution fit, which sadly bedevils many organisations today. The spate of failed or unsuccessful technology-based product/ services begs whether organisations, including the leadership team, value the importance of customers besides earning revenue from them.

In the world of high-end and sophisticated technology, most leaders have lost focus on the presence of customer needs in user requirements.

For payment-based solutions, leaders and project teams need to realise that a solution’s “momentof-truth” occurs primarily at the payment point when a customer attempts to initiate or complete a

54

PAYMENT

transaction. Customers are likely

or other industries. It allows

Many people have lost deals and

not to have interaction if there is no

businesses to define the category of

contracts to competitors solely

complexity in getting value during

their solution in customer terms.

because they paid little or no

payment. Consumers determine

In other words, thought leadership

attention to the customer’s needs.

the growth of an organisation;

is all about meeting the customer’s

When you provide a payment

user advertisement of a product

needs in the customer’s ways.

solution to a customer’s needs

is a driver to a firm’s customer

Every business wants to provide a

and do it in a way that it makes

base. In communication, end-user

solution to its customers but not all

them happy, the customers stick

satisfaction spreads like the good

of them are done with the customer

with you, which in turn drives

news that drives the marketing of a

as the main goal, a lot ignore the

more profit for an organisation. A

product.

customer’s journey. Leadership

focus on profit is good; however,

thought shifts focus of service

making a continuous profit as a

delivery from profit making to the

business is the primary goal of

customer which indirectly increases

every organisation and this can only

profit when executed properly.

be achieved by constantly providing

Leadership means providing the best and deepest answers, to your customers’ biggest questions, in the formats your audience likes to consume. It means creating solutions to customer’s common needs in a way that the customer prefers.

The much-vaunted statement, “the customer is king,” still holds today. The ubiquitous nature of communication has amplified the customer’s influence. They are much more informed, assertive, discerning, and their tastes and demands change like the seasons.

They drive business opportunities among other users. Gone are the days where payment firms largely dictated how markets move and what consumers want. Customers today KNOW what they want, and if they do not get it with, say, Company A, they have no qualms pivoting to Company B, C or wherever the need will be fulfilled.

Brand loyalty and brand advocacy are precious luxuries in this day and age. Organisations that take proactive actions in conducting profitability analysis and customer studies often unlock the secrets to

It emphasises doing things the

profitability and create loyal brand

customer’s way. This process

ambassadors (who often don’t need

can help anyone involved in the

to be paid a single fee) and discover

business decision to gain alignment

new opportunities that were

among their peers in the electronic

previously untapped.

solutions to customer’s needs as they evolve. Practices aimed at maximising customer satisfaction create a mutually reinforcing value chain, as happy customers continue to support companies that successfully meet their needs.

In turn, the business reaps the benefit of increased revenue, which provides tangible and intangible benefits for employees. It enables the company to continue keeping customers happy and elongated with the company’s existence and products. Attention to the customer’s needs can build loyalty to the company, increasing longterm profitability through repeat sales and word-of-mouth referrals and customer retention. As leaders, product managers, payment solution delivery managers or any portfolio you manage that involves providing services, know that CUSTOMERS are in control.

payment industry they fall into

55

WHY IT’S IMPORTANT FOR

BUSINESSES TO BE PROACTIVE ABOUT

CYBERCRIME P

ermutations project that over 7.5 billion people will be using the internet by the

Ryan Mer Managing Director Eftsure

lines of novel software are being produced yearly. These are exciting growth projections, nevertheless, it presents a disturbing number of weaknesses that can be exploited by cybercriminals.

According to Ryan Mer, the managing director of eftsure Africa, a Know Your Payee (KYP) platform provider, cybersecurity is often a people problem at the onset; “While the amount of business transactions taking place online is constantly growing and working from home is now commonplace, business controls have not kept pace with digital transformation.

This has led to increasing demand for cybersecurity solutions.”

When the permutations above are considered alongside the projected 96 zettabytes of digital content being produced at the moment; such a huge volume of activities would only lead to an increase in cyber-attacks and other online criminal activities which may be nigh-impossible for humans to combat.

This area, according to Mer, is where eftsure SaaS platform comes 56

Here are some tips from Mer which will help your business stay ahead of cybercrime:

year 2030. In the same vein, it is estimated that about 111 billion

the holes in the payment network.

in to support businesses of all sizes. eftsure has positioned itself to provide validation of payee and payment data software to help businesses combat the menace of payment fraud in the B2B sector.

“We provide a platform to digitise and automate the verification of payee and eft payment data, on a continuous basis through our KYP technology. Eftsure protects companies against fraud and error made through incorrect, fraudulently changed or maliciously altered payee information.”

All cybercrime activities targeted at businesses are often propelled by social engineering, email usage, and

1. KNOW THE RISKS Criminal tactics never stay static, their tactics change regularly and may include phishing, ransomware, social engineering, business email breach, malicious software, and sometimes, insiders are recruited to help in breaking down the security apparatus from within. Several organizations depend on manual systems that have too many gaping holes and are often too reliant on human input. The first step towards protecting yourself and your business is to research and understand the several possible means through which you could be attacked. It is also paramount

that you understand risks or

take a lot of time and are generally

regularly and when possible, enable

vulnerabilities peculiar to your

ineffective, with notable risks. The

two-factor verification. Review

business. You should also identify

best option is to use independent

your remote access provision to be

weak spots which means examining

third-party platforms like eftsure.

sure there are no vulnerabilities

or putting your current processes

They can provide support with

in the provision of that particular

to the test to discover vulnerable

the management of supplier data

service.

spots. This test is best handled by

and make payment checking and

external professionals.

supplier verification automatic.

2. MAKE PAYMENT SECURITY TIGHTER Now that you have understood the threats and dangers you face as a business in cyberspace, you must take a good look at your

They help you manage time and eliminate a lot of human error.

5. EDUCATE YOUR STAFF You should equip your employees

3. MAKE CYBERSECURITY PART OF YOUR CULTURE

with skills and tools to notice threats and counter them effectively. This is necessary because employees are often the major targets of cybercrime

payment processes to fish out

If you are always drumming the

particularly those in finance and

possible vulnerabilities. Any hole

risks associated with cybercrime

accounts. Such things as cyber

you discover could be handled by

into the ears of your staff at all

safety awareness programs,

adding extra verification steps or

levels, they will assimilate and grow

simulations, and workshops can be

separation of duties between staff.

a strong security consciousness

introduced in your business to help

You must encourage your staff -as a

with time. Set the right tone from

staff learn to identify phishing and

matter of importance- to question

the highest to the lowest employee

spam messages. It will also help

any request that looks suspicious

and ensure that management leads

staff take note of the sheer volume

irrespective of who they come from;

the cybersecurity culture. Don’t

of the threat out there. Remember

actively making this a part of the

think you’ve done it all, this is

to educate them on how to spot and

culture of your organization would

only the beginning. Review threats

report suspicious activities online.

be very useful.

and vulnerabilities constantly and

Members of staff should also be encouraged to avoid relying entirely on email, instead, they should confirm and verify money transfer requests and any change in supplier payment information actively.

Although it is helpful to check with senior executives or confirm through phone, these methods

always try to improve your security always because criminals are constantly evolving new systems.

4. IMPROVE YOUR BASIC SECURITY SETUP You may want to restrict user access to specific systems and applications, this will help you to limit access to current employees only and keep former employees

About eftsure eftsure is a universal, systemagnostic solution, built with the sole aim of providing businesses with the ability to control, manage and protect the full cycle of a payee beginning from the onboarding to the final point of payment. eftsure’s secure payee management portal enables businesses to

out of your system.

onboard and verify payees with

Think about a possible upgrade of

and accuracy. eftsure also

the company password. One trick

makes the payment checking

could be making a combination of

process fully automatic,

letters, symbols, and numbers or

actively, at the point of

more characters a requirement.

payment, and before the

Remember to change passwords

release of payment.

improved efficiency, certainty,

BLOCKCHAIN

THE OUTL OOK FOR CENTRAL B AN K D I G I TA L

CURRENCIES An article named Technology and Sovereignty was published by Foreign affairs in 1980. It threw light on the fact that international monetary policies and financial markets will be changed due to technological innovations in the future. They predicted that this could change the balance of power on a global level. This was proved to be true as the internet revolution changed the whole world by introducing a new era of financial globalisation.

Due to the global financial crisis,

There has been an increase in

there was a need for a truly

digital currency development by

international currency. Bitcoin was

the central banks across the world

introduced to serve the purpose but

in the last year. Many central

being highly volatile, it is used as a

banks are currently spending on

speculative financial asset instead

the research and tests related to

of being circulated for international

introducing a CBDC.

payments.

All the countries are adopting

launch OF CBDC was done by The

digital solutions for the current

Bahamas. They named their digital

problems in their financial and

currency the Sand dollar. It is the

banking systems. Central banks

digital replica of their currency in

across the globe are trying to

circulation to provide more easy

solve financial system issues by

access to financial services to the

introducing digital currencies.

public. Collaboration was made with

Many cryptocurrencies have

MasterCard which gives an option

become popular in recent years

of transferring digital currency to

along with the world facing the

traditional currencies. It facilitates

covid 19 pandemic there has been

the financial transactions made in

a need for cashless transactions

the countries where MasterCard

to control the further spread of

is accepted.

the virus. The interest has been increased in developing a central bank digital currency that could cater to all the current issues in the financial markets.

58

Recently in 2020, the first official

A survey was done by the Bank for international settlements to check the current status of developing a central bank digital currency

BLOCKCHAIN

globally. It included 65 central

Central Bank Digital Currency in

as occupying the top position in

banks from around the world. It

Africa. The central bank of Nigeria

search of bitcoin across the world.

revealed that 86% of the central

states the central bank digital

banks are currently working on

currency as fiat money and not a

developing a CBDC. They are trying

cryptocurrency. It decided to create

to develop a digital currency that

the digital form of the naira to

safeguards the public trust in the

serve as a CBDC. As this currency

national currencies as well as help

is backed by the central bank so

them in achieving their financial

sole liability in case of default of

system objectives. Creating

this money lies with the central

Price stability and safe payment

bank of Nigeria. The founder of

infrastructure is also one of the

the Global Policy House stated that

main objectives of the central

CBDC should be explored by the

banks. New digital currencies

authorities as it will be the future of

issued by the central banks will be

the monetary system in the coming

the replications of their traditional

decade.

money.

Major arguments given in the

The evolution of cryptocurrencies

favour of the CBDC are that it

is proof of a tech-driven global

provides access to legal tender

monetary system. The use of

in case of a cash shortage or

cryptocurrencies has increased in

unavailability of cash in the

Nigeria in recent years. The security

financial system. Some also argue

exchange commission of Nigeria

that in a post covid world digital

made regulations specifically for

money is the solution to stop the

digital currency. The central bank of

further spread of the virus.

Nigeria also played a pivotal role in defining cryptocurrency under the

Many countries do not fully trust

financial regime of the country.

cryptocurrencies as a permanent

Bitcoin was introduced as a

warned its public about using

decentralised money system

cryptocurrencies. Despite the

in which there won’t be any

warnings given by the central

interference from a third party

bank of Nigeria, the public is

like government or financial

still interested in dealing with

institutions. Blockchain-based

digital assets. Nigeria is one

Cryptocurrencies evolved as legal

of the top countries dealing in

tender money. There are many

cryptocurrencies.

reasons for adopting the central bank digital currency. It is adopted depending upon the population and maturity of the financial system of

monetary solution. Nigeria also

Nigeria, however, has held off having any direct relationship with cryptocurrency. Regardless

the country.

of its warnings, Nigeria continues

Global Policy House recently

world carrying out peer-to-peer

organised a conference about

cryptocurrency transactions as well

Despite the arguments whether it is good or bad, the majority of the population is interested in using a digital currency for their monetary transactions. Because of this increasing interest and changes in the global financial systems, many central banks are developing a CBDC. In the case of creating a CBDC, the following factors will play a key role in its development.

Central banks need to make clear policies about a central bank digital currency design. The majority of stakeholders must promote the concept of using a CBDC. A strong legal framework should be implemented for the issuance and distribution of CBDC. Central banks should ensure the efficient use of digital currency within the economy. Necessary money market reforms should be done so as to make digital money easily accessible and adaptable.

Strengthening all the abovementioned policies could change the general perception of the public in case of adopting the digital currency and its issuance. It will take time to create a supportive global monetary system that will use only digital currencies.

But there is no doubt that digital currency is going to be the future of the global financial markets.

to make the top countries in the

59

BLOCKCHAIN

CARDANO AFRICA:

BREAKING DOWN BARRIERS C

ardano was incorporated in 2015 by Ethereum. It is a blockchain and cryptocurrency organisation based in Zug, Switzerland. The main purpose

of this organisation is to promote, protect and standardise the Cardano protocol technology.

Cardano Africa is an open and decentralised blockchain platform for the public. It was created to run smart contracts within the economy. It facilitates peer-to-peer transactions using its internal cryptocurrency asset. It was developed and supervised by the Cardano Foundation.

60

BANKING THE UNBANKED IN AFRICA Cardano has been in Africa for three years. Currently, it is providing many modern tech-driven services to society. It publicises itself as the first peer-reviewed blockchain technology which is going to facilitate the underdeveloped countries and regions around the globe. One of the regions which have been focused on by Cardano is Africa with the goal of reaching the unbanked and turning them into a banked population.

BLOCKCHAIN

the unbanked, IOHK being the

help in verifying the grades on a

development team behind the

digital basis. Cardano introduced

Cardano, signed a memorandum of

an identity solution named Atala

understanding with the Ethiopian

PRISM which will be built on

government. It will help in

Cardano.

providing training to the junior Software developers so they can use the modern technology built on Cardano in their agricultural

Ethiopia has introduced a new

and maintained. In the case of

digital transformation strategy

blockchain technology, nobody

named Digital Ethiopia 2025. The

can alter or make a change to the

digital transformation strategy was

available information or data so

made by the Ethiopian government

there will be transparency in the

to digitalise the different sectors of

data.

the PRISM platform will bring new opportunities and working methodologies. Digital IDs provided by the Cardano system will be used for transport, health care, and agricultural supply chains.

devised a new strategy named the Africa strategy. This strategy includes resolving real market issues of the shareholders in the African markets. By engaging the stakeholders with new projects and

INTRODUCING DIGITAL EDUCATIONAL SYSTEM IN AFRICA Cardano is also providing other technological solutions for the region to increase the awareness and better adoption of their company.

educating them to find solutions for

It announced a partnership

their operating activities, Cardano

with the Ethiopian government

aims to increase its adoption in

which will aim to provide a

the local community and African

modern technological solution

markets.

for the educational system. They

PARTNERSHIP WITH ETHIOPIAN GOVERNMENT To achieve its goal of banking

the institution’s performance. A tamper-proof record of educational

agriculture, and tourism. Adopting

Cardano’s development team

help the authorities in monitoring

system.

the economy like manufacturing,

To reach its goal in Africa,

This identity solution will greatly

introduced a new student and teacher ID attainment recording system which will use blockchain technology. It will help in

performance will be created

Atala PRISM will help in maintaining data on the educational performance of 5 million students and 750,000 teachers. It will cover almost 3500 schools in the area to find out the schools where educational performance is not good. It will also help in identifying the cause of that underachievement and allocating the necessary educational resources.

All the students will get block chain verified digital qualifications which will help in the reduction of fraudulent job applications. It will enable the employers to verify the qualifications of the applicants in a short period. There will be no further need for third-party agencies. Social mobility will be increased by introducing this system. The government of Ethiopia recently issued a national identity standard. Atala PRISM will issue IDs based on this national identity standard and ensure tamper-proof data management.

monitoring the performance of the schools remotely. It will also 61

BLOCKCHAIN

TRACKING THE EDUCATIONAL PERFORMANCE Using Cardano for detecting the educational performance within the country will bring transparency and accuracy to the system. This will help in tracking the individual grades, attendance, and behavior of the students across all elementary and general secondary schools.

Teachers can also use the same technology to report the behaviors of the students as well as the dropouts from the school.

The Ethiopian government is providing tablets and internet networks to five million teachers and students. This will enable the students to get instant access to their educational records. This will result in an increased number of employment opportunities for the population living in the rural areas.

The student IDs will be paired with the data available from the learning management system. Machine learning algorithms will help in driving personalised tuition and a dynamic curriculum.

This system could be expanded to college and university levels. It will greatly reduce the number of fraudulent activities in the case of higher studies and job applications.

REACHING THE UNBANKED THROUGH THE SMART AFRICA PROGRAM To reach the unbanked population of Africa, Cardano also took another 62

initiative named SMART Africa. 24

where blockchain technology

countries within the continent of

could advance their missions.

Africa have already signed up for

So they can reach the maximum

it. This program is entirely focused

unbanked population. They aim to

on providing digital infrastructure

provide easily accessible and fast

by making heavy investments for

financial services to the rural areas

African industries. This will help in

population as well.

the growth of the industries and it will create massive opportunities.

The Smart Africa project has so far focused on mobile broadband centers, satellites, Fibre optic

Implementing

networks, data centers, etc.

blockchain technology

To provide better access to financial

in the African continent

services to the unbanked, Cardano’s

is going to be beneficial

launched a light wallet named Yoroi. This wallet is available on both Apple’s App Store and Google play to ensure easy access to the unbanked population. With the usage of blockchain solutions, this wallet is providing fast and secure access to Cardano’s cryptocurrency asset, ADA. By using modern technology Cardano is creating trusted databases that will reduce the barriers to entry into the African market and increase the adoption percentage.

CARDANO FOUNDATION AND SAVE THE CHILDREN Cardano foundation and international nonprofit organisations are joining hands to help the community by using Cardano and digital currency methods to provide benefits to the needy people in East Africa.

Cardano will work to save the children’s team in Rwanda. It will help in identifying the areas

in the future as they compete with other nations. Although the region needs to develop its financial, administrative, and legislative system, technological development has been increased in Africa with the introduction of blockchain technology. Any further development of Africa’s infrastructure will also bring reward for the Cardano ecosystem.

CARDANO

63

BLOCKCHAIN

EVERYTHING YOU NEED TO

KNOW ABOUT

NFTS M

ike Winkelmann, also

How Does NFT Work?

the digital market that has garnered

Also known as immutable tokens,

artwork sold for $69.3 million at

artwork as NFT. The JPEG image,

NFTs work on the foundation of

Christie’s auction.

titled “Everydays: the First 5,000

blockchain technology. With them,

Days”, was sold for $69.4 million,

digital storage of audio, visual,

making it the highest price paid in

and written works can be achieved.

an NFT. The artwork also stands

Non-fungible tokens are used to

third in the list of most expensive

describe assets developed using

works among living artists. So what

blockchain technology.

known as Beeple or Beeple Crap, sold his

does Non-Fungible Token mean, and how expensive are they?

The majority of NFTs are part of

Non-Fungible Tokens (NFTs)

currency similar to Dogecoin or

A non-fungible token (NFT) is a single, unique token encrypted on the blockchain infrastructure.

As we are aware that bitcoin is a changeable coin, NFTs are unique and cannot be changed.

The most amazing feature of NFT is that it is a proprietary asset and one of a kind. Put simply; these tokens are different from the usual coins because they are created in different values and originality that cannot be modified.

64

the Ethereum blockchain. It is a Bitcoin, but the blockchain also supports NFTs. What makes NFTs unique is that it is bound to a single token. They have metadata processed by a cryptographic hash function — an algorithm that comprises a unique string of numbers and letters.

NFTs are a completely new form of digital collection. They are a certificate of authenticity and rarity developed by the blockchain for a digital asset such as a music video, album, or piece of art. It is a part of

a lot of interest, with a digital

Where are NFTs Used?

NFTs are used in art creations and areas that require digital ownership.

For example, it can be found in digital collectibles, online gaming, and artworks. NFTs can be a piece of art, a basketball card, music albums, stamps, etc.

Moreover, NFTs can even be a tweet. For instance, Twitter founder Jack Dorsey sold his first tweet as NFT for a whopping $2.9 million. This means that he was paid $580,000 for each word in his tweet, “just setting up my twttr”.

He said that all the proceedings would be converted to Bitcoin and donated to GiveDirectly, a charity, to provide COVID-19 support to six African countries.

King of Leon made more than $2 million by selling NFTs of their

BLOCKCHAIN

latest album. On the other hand, a

diamonds are stones. Can we buy a

platform Gadget and is up for

Lebron James match NFT card was

house without any paperwork? No,

auction. This article is a digital

sold for $208,000 on the NBA Top

we need currency for that. So what

image of the country’s oldest

Shot platform.

differentiates the two products with

surviving online game review that

the same raw material? Is it people

made its appearance in 1998. This

adding more value to it?

comes a few weeks after Worldart

Why Do People Pay in NFTs? Imagine the extraordinary artwork

by Vincent Van Gogh — The Starry Night. Investments are made in cryptocurrencies, precious metals, shares, and such paintings because unique products can hold their value for decades or even centuries.

In fact, art is an aesthetic tool for aesthetic pleasures, and the same applies to their digital versions too.

Now you must be thinking, “How can a digital work of art, such as a photograph or a tweet be special?

It can be copied or downloaded with one click.” The truth is, you cannot draw The Starry Night again, but you can get it printed

— Cape Town’s art gallery —

The logic of NFTs is the same. Putting up an auction for digital products that society and its people valued and wanted to have.

Who knows, maybe in the future, even YouTube videos will be available in the markets where currently only digital items such as tweets or art pieces are getting sold.

thousands of dollars for this kind of digital product?

This is what makes NFTs unique and important. Blockchain technology is the key that increases the value of digital products from essence. Thanks to its unique cryptography features, blockchain offers true ownership of a product to its owners. Put simply, the product you purchase is a “real digital copy”, and nobody can claim NFT. If it’s still difficult for you to understand, think about it this way. US dollars, gold, or diamonds actually have no sense. The dollar is a piece of paper. Gold is a metal and

its art up for auction as an NFT. The artwork depicts a superhero-styled woman called Timekeeper 151, developed by artist Normal O’Flynn.

While the blockchain-based cryptocurrency has gained popularity in the local art industry, experts think it will penetrate into other industries as more companies are getting to know its valuable use cases for creating art and other things. General Manager of Luno Africa, Marius Reitz, said that while NFTs have been around since 2015, it was only after the popularity of other cryptocurrencies such as Bitcoin and Ether that they gained

or downloaded from the internet.

Why would you pay hundreds of

became the first local gallery to put

The Rise of NFTs in South Africa NFTs are becoming more and more

popularity in the South African markets.

The Bottom Line

popular amongst South African

Non-fungible tokens (NFT) are

companies, with new developments

developed through cryptocurrency

being released locally, and this

and recorded on the blockchain.

cryptographic craze is becoming a

NFTs cannot be copied, mass

common marketplace across the

reproduced, or cut into smaller

world. As per industry experts,

parts. They may be used for a wide

while NFTs are still in the nascent

range of purposes, such as smart

stages, local companies are

contracts and validating ownership.

witnessing a massive potential in them. They believe that NFTs hold immense benefits for investors and

The rise of NFTs during 2021 gave rise to a lot of media hype and

organizations across sectors.

controversy. Even though they

South Africa’s first NFT of a

mainstream, NFTs are a budding

media article called Gadget1998

asset class with a volatile and

was introduced by online media

uncertain future.

are still not a part of the financial

65

TERACO TO ENHANCE REGIONAL INTERCONNECTION THROUGH THE METISS CABLING SYSTEM

T

eraco, the giant of interconnected data center

Ocean islands with direct access to more than

operation in Africa is now a fundamental link

300 networks in the Teraco ecosystem, 50 worldwide

to the METISS (Melting Pot Indian Oceanic

content providers, 130 IT service providers, and the

Submarine).

core global cloud providers. South Africa’s potential

According to Michele McCann, Teraco’s Head of Interconnection and Peering, the members of the MÉTISS Consortium have infrastructure in the Johannesburg (JB1) data center facility as well as the Teraco Durban (DB1) facility, providing the Indian

market for cloud and content providers expands with the introduction of another cable to service the regions within the Indian Ocean islands. This way, the current telecommunications infrastructure becomes more adaptable.

MÉTISS, a subsea fiber optic cable system, runs

control, reliable traffic exchange, and enhanced

3200km between South Africa and the Indian Ocean

network performance.

islands of Mauritius, Madagascar, and Reunion.

Zeop, Emtel, SRR (SFR) Telma, CEB Fibernet, and Canal + Telecom make up the MÉTISS consortium.

Touching down in Amanzimtoti, the MÉTISS cable is backhauled to Teraco’s Durban (DB1) data center by

There is an increasing demand for higher bandwidth which is being resolved through interconnection and peering. This needs to be cost-effective and achieved with as little latency as possible. The Indian

Liquid Telecoms.

Ocean Island region will not only benefit from the

Enterprises, multinationals, and organizations

also enjoy a boost in its digital economy. Thanks

with eyes on the region can rely on the abilities

to Teraco, everyone has fast and easy access to

and services of MÉTISS to facilitate their digital

connections within the data center.

strategies.

Teraco’s DB1 is located on the north coast of Durban.

A strategic interconnection hub on the subsea cable map of Africa, it is connected to MÉTISS and the existing EASSy and Seacom cable systems. The Teraco DB1 facility and Johannesburg JB1 campus in Isando are linked by a wide array of carriers through different regional fiber routes. This makes it possible for clients to connect with a higher number of partners and broaden their horizons into new markets. Clients of the Teraco DB1 facility are provided with interconnection services, secure colocation, and direct access to Teraco’s DB1 and JB1 digital hubs.

McCann said, “The cable brings connectivity across regions that were previously hard to reach. Through Teraco, access to this cable is an interconnect away, and in keeping with our tagline, ‘the world connects here’, we are very proud to play such a pivotal role in the success of this cable system.” The island region now has access to peer at NAPAfrica, Africa’s Internet exchange giant. This comes with many advantages such as network fault tolerance, increased routing

interconnection that the MÉTISS cable provides but

ABOUT TERACO Teraco is the foremost interconnected data center hub in Africa, providing carrier and cloud-neutral colocation data centers and boasting more than 18500 crossconnects. Teraco closes the gap between the digital edge and global content, being a leader in making subSaharan Africa a highly adaptable, vendor-neutral data environment.

Offering a network dense ecosystem and worldclass data center infrastructure, Teraco is established as a core element of Africa’s Internet and a vital element of the modern enterprise’s strategy for digital transformation. Due to its growing ecosystem, colocation has become only a small fraction of Teraco’s scope as it is also an established open marketplace attending to digital innovation and development. A highly adaptable, resilient, and secure home for digital establishments all over the world, Teraco discovers potential business partners, implements strategic interconnection, on-ramps your cloud choices, and connects with new markets across the globe.