Written by Freda Gray
"Having a bank account should be a birth right” says Wizzit Founding Director and CEO, Brian Richardson, one of the panellists and presenters at the recent Fintech Rising Africa conference.
Financial inclusion in Africa was just one of the key discussion points at the conference which took place in Cape Town on 7-8 December.
The nature of the event, a number of panel discussions and a smaller knowledgeable group, lent itself to active participation in many great discussions, focussing on all aspects of the fintech ecosystem. To top it all there were various excellent fintech solutions showcased.
Experts from financial institutions, telcos and fintech startups debated (among other issues) who will take responsibility for banking the unbanked. The fintech startups play an important role in solving this problem, not only in Africa, as was evident looking at the solutions showcased:
- Matchi member Wizzit, offers a mobile, "branchless banking model" to registered financial institutions. Regarded as a global pioneer in mobile banking their solution is already used in 11 countries and targets the unbanked and under banked population.
- A young start up that links Stokvels (invitation only group saving club) looking to grow their savings, with small businesses looking to access loans for growth.
In many parts of Africa digital identity is hampered by the lack of formal documentation as well as limited internet connectivity and of course the hardware to use the internet. The connectivity and hardware issues should be resolved with the highest growth rates globally expected in Sub Saharan Africa for mobile subscriptions (6%), smartphone subscriptions (17%) and total mobile data traffic (50%) by 2023.
- Multiple award winning (and Matchi member) solution ThisIsMe, uses for example Biometric Scanning, Social Media Account Association and smart Machine Learning Verification processes to improve the KYC and verification, regulatory compliance for the Financial institutions and customer journey, while empowering individuals to control their own identity.
- Giving the owner control over their own identity is also core to the Smart Consent App. Built on Ethereum Blockchain the app provides access to a secure platform from where the user can share data and autocomplete paperwork.
The recent political turmoil in Zimbabwe and its effect on bitcoin confirmed that crypto currency is most attractive when confidence in institutions fall. Bitcoin could be seen to protect ones savings from local politics and can be seamlessly sent to family members in other countries where local entrepreneurs with just a phone and a pocket full of cash, can do the exchange.
At the conference Farzam Ehsani, Blockchain Lead at RMB and Chairperson of the South African Financial Blockchain Consortium, confirmed that blockchain technology will be as transformative to the financial system as the internet has been to the world. According to Farzam the characteristics of “good money” include that it is divisible, durable, fungible, portable, secure and acceptable. Acceptability is linked to trust and sceptics (also in big financial institutions) feel that bitcoin has no intrinsic value because nothing backs it. But, argues Farzam, the modern dollar was decoupled from the gold standard in the 70’s and is only about five times older than bitcoin. Why would you trust it more?
Fintech future that is now
Witin the fintech ecosystem each player has a significant contribution to make. Just looking at Financial Institutions and fintech providers, there is a lot they can gain from partnerships and the value to the customer is significant as some of the other solutions showcased at the event showed:
- Chatbots to help financial service providers acquire & retain customers using AI-powered conversations. Personalised text based conversation has become the new medium connecting businesses with customers, in real time. In addition to the improved experience, lower operational cost chatbots also provide impactful insights to better classify, identify and understand customer needs.
- An insurance product offering that enables retailers, service providers, distributors and brokers to bolt on a selection of over 20 custom developed insurance products, at the point of sale. In addition the fullstack digital insurance platform offers automated claims processing and administration with full policy life cycle management.
- FitMoney, is a platform offered to banks and insurers that helps small and medium businesses manage their working capital and invest their excess cash, almost like a “digital treasurer”. Financial institutions benefit from the additional data gathered, automation and building relationships with their business clients.
Africa is also making progress toward launching a digital bank. South African start-up Bettr Finance is preparing to launch its mobile banking service – with no monthly account fees and no bricks and mortar branches. Currently in private alpha testing and development mode, a community of interested users are helping to co-create and design this new banking experience.
To grow an ecosystem like financial services it is crucial for parties to interact and debate issues. This conference offered the perfect platform and will serve to move towards ensuring all Africans get access to financial services to stimulate economic growth on the continent.