E-Business

Africa 2020 Presents Exciting Opportunities for Asset Managers- PwC

Published

9 years ago

July 30, 2015

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New research from PwC predicts that traditional assets under management (AuM) in 12 markets across Africa will rise to around $1,098 billion by 2020, from a 2008 total of $293 billion.

This represents a compound annual growth rate (CAGR) of nearly 9.6%. Traditional asset management, in particular the mutual fund industry, is expanding aggressively across Africa.

This will largely be driven by a number of factors: economic growth and the subsequent rise in wealth will boost the demand for pensions and life insurance products, the demand for retail investment funds will consequently increase, and the widespread adoption of technology will make delivery of new products cheaper, bringing more consumers into the formal financial sector.

The report, Africa Asset Management 2020, is an in-depth study which examines the asset management industry across 12 African countries which have financial markets of varying levels of development.

The countries, which represent a sample from Northern, Eastern, Western and Southern Africa, were assessed by a range of relevant indicators in order to capture their true investment potential.

The countries were categorised into three groups: advancing markets, promising markets, and nascent markets.

In addition, the report outlines and analyses the future game changers for investment into Africa as a whole as well as addressing the impacts for these specific markets.

Speaking on the trend, Ilse French, PwC Africa Asset Management Leader, said, “As Africa has entered the 21st century, economic growth has surpassed expectations and stimulated investor interest across a broad range of asset classes. Although the fund industry in Africa is, in most countries, still developing and has much to prove, global and local asset managers are likely to become more active as the industry continues to flourish.”

PwC also predicts that the global rise in the volume of investable assets which has taken place over the last two or three decades is set to continue to increase in the future and investable assets are set to be significantly higher in 2020 than today.

Also, a recent research conducted by PwC projects that global AuM will rise to around $101.7 trillion by 2020.

Although Africa is a small part of the global industry it is a region that is experiencing significant growth.

It is interesting to note that retail investors form a small proportion of investors in asset management in Africa.

However, the report suggests that the number of retail investors in these markets could be increased by way of education about products, encouragement of a savings and investment culture, and overall economic growth.

Capital Markets in Africa

Capital market regulation varies widely across Africa as legislation and regulatory structures differs between countries, reflecting both market and varied historical conditions.

In some countries, capital market regulations falls under the realm of the central bank, while in others they are under the auspices of the independent regulatory commission.

Although the GDP growth rate in Africa is on the rise, the savings and investment culture has not yet caught up and for the most part, capital markets remain small and illiquid.

Regulations to boost the capital markets are under discussion in some countries, such as encouraging pension funds to invest in locally listed companies.

Investors and Distributors

All parts of the financial services sectors are expected to continue to expand to 2020 and beyond, but bank assets will wane in the coming years as competition is fuelled by new entrants and regulatory reforms.

A number of banks have set up their own asset management subsidiaries in a bid to push their own proprietary products.

Some of these banks are also seeking cooperation with foreign asset managers to promote their African investment strategies in other parts of the world in exchange for promotion of other asset managers’ investment strategies in Africa.

Banks have the best distribution network and they will likely remain the main distributors in the future.

The pension fund sector in the 12 countries in this study has grown steadily from 2006 to 2014 and is expected to continue to grow considerably.

As these economies mature, pensions are becoming more significant as a part of the financial services sector, although many countries still have no private pension schemes.

However, change is underway with Mauritius and Ghana serving as examples of countries that have created three pillar pension schemes encompassing a third tier of voluntary schemes for middle class workers.

The insurance industry is also growing but, Africa has a low average penetration rate of about 3.5% of GDP, with the exception of South Africa which is over 15%.

As with pension funds, insurance companies outsource part of their asset management to third parties.

Private Investment

Currently private equity (PE) investment is the most interesting form of investment for foreign investors as a result of illiquidity in the capital markets.

But the lack of availability of exit options remains a concern for potential private equity investors in Africa.

Infrastructure is also considered to be a major opportunity for investment. The World Bank has estimated that an annual spending of $93 billion would be required to achieve national development targets in Africa and close the infrastructure gap.

Many African countries have taken longer to catch up on infrastructure and the recent economic uncertainty further underscores the need for a massive need to overhaul Africa’s infrastructure.

Game Changers: Global Megatrends

“Significant global and continent megatrends, we refer to as the ‘game changers’, will also help drive the market and create future opportunities,” said French.

“Africa’s demographic dividend, its growing middle class, its increased use of technology, and its rapid urbanisation will all have a part to play in the development of the asset management industry in Africa.”

Demographic Dividend

Africa currently represents 15% of the world’s population and 3% of the world’s GDP and less than 1% of the world’s stock market.

But that is changing. “There will be diverse opportunities and these will be different to those in the developed world,” added French. Africa’s population growth and the resulting demographic dividend could boost economic growth.

Investment is necessary in some industries in order to create labour productivity and economic diversification, and reduce poverty rates.

If policies are implemented to create enough employment for the enlarged workforce, the falling dependency rates should increase both savings and investment and create a substantial demand for savings products.

Growing Middle Class

Africa’s middle class has increased substantially over the past decade. Standard Bank’s report on the middle-class in Africa indicates that Nigeria will add 7.6 million middle class households by 2030, while Ghana will add 1.6 million.

The middle classes are associated with a great emphasis on education and saving. This will increase demand for sophisticated financial services and investment products such as retail investment funds, thereby significantly boosting the asset management industry.

Increased Use of Technology

Technology is increasingly changing the face of Africa. Mobile financial services have taken off as larger portions of the population access the web by way of mobile devices compared to fixed line internet.

Mobile technology is also enhancing financial services across Africa by way of a non-banked model and a banking model.

However, data security may become a key concern in the future requiring closer collaboration between telecoms and financial regulators.

Urbanisation and Infrastructure

Poor infrastructure in Africa is an impediment to economic growth and improvements in this area are required.

PwC research suggests that infrastructure spending in sub-Saharan Africa will exceed $180bn by 2025.

The shortfall in government funding creates opportunities for private investors to get involved either through direct investment or public-private partnerships.

Currently Africa’s urban population is increasing by 1.1 percent annually and is expected to have a major impact on real estate and infrastructure by 2020.

In addition, PE is growing across Africa. Although the majority of deals are small in size, it seems likely that deal size will grow to be more in line with other emerging markets as their economies and regulatory frameworks develop.

Development of the African Financial Services Industry

The 12 countries in this study vary from those with extensive legislative frameworks, such as South Africa, to those in much earlier stages in the development of their regulatory frameworks, such as Angola.

Regulatory reform is likely to boost economic growth and stimulate investor appetite. Changes to regulations to pension funds in particular could have an effect on the asset management industry as public pensions are usually the largest institutional investors in many African countries.

These changes include allowing pension funds to invest in a wide range of assets or the establishment of a three tier pension system.

In addition, sovereign wealth funds (SWFs) can fill existing funding gaps until the legal frameworks of African countries develop sufficiently to make them appealing to other investors.

“As large institutional investors, SWFs could provide a considerable boost to the asset management industry in Africa, particularly because they are long-term investors who seek stable returns,” added French.

The fact that most of the funds use a proportion of their assets to make impact investments domestically or regionally suggests that they will become big players in local markets.

“As asset managers look for new investment channels and competition becomes increasingly intense, understanding the characteristics of the local markets will be crucial to grasp the potential of this final frontier,” concluded French.

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E-Business

Flexify Solutions Launches CyberAgric App to Revolutionize Agricultural Sector in Nigeria

Published

49 mins ago

May 8, 2024

Comms Week

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Flexify Solutions, a leading tech-based firm in Oyo State, has introduced “CyberAgric,” an innovative solution designed to drive food production in Nigeria.

This is in recognition of the crucial role of modern agricultural practices in ensuring food security.

Food security is a top priority for every nation, and Nigeria is no exception.

CyberAgric is a cutting-edge mobile application that leverages artificial intelligence (AI) to support Nigerian farmers, particularly those involved in cash crop cultivation such as cassava and maize.

The app’s groundbreaking features include early disease detection, with the capability to identify diseases like Cassava Brown Streak Disease (CBSD) in cassava leaves within the first two weeks of infection.

By utilizing smartphone cameras, farmers can capture images of their crops and receive real-time analysis and recommendations, empowering them to take proactive measures to protect their crops and ensure optimal yields.

Moreover, CyberAgric is designed to function offline, ensuring accessibility for farmers in remote areas with limited internet connectivity.

Speaking on the significance of CyberAgric, Johnson Oyeniyi, CEO of Flexify Solutions, emphasized the app’s accessibility and educational value. “Our goal with CyberAgric is to ensure that every Nigerian farmer, regardless of their location or internet access, can benefit from advanced agricultural technology,” said Oyeniyi.

“Beyond disease detection, the app serves as an educational platform, providing farmers with the latest agricultural best practices and expert resources.”

Flexify Solutions collaborated closely with Cybermate Technologies to tailor CyberAgric to the specific needs of Nigerian farmers.

The app initially focuses on cassava and maize cultivation, addressing the critical challenges faced by farmers in these sectors.

Through advanced AI-driven disease detection capabilities, CyberAgric aims to mitigate the impact of crop diseases and enhance food security in Nigeria.

Flexify Solutions Ltd is a global company specializing in disruptive digital solutions. With a strong focus on innovation, Flexify Solutions excels in crafting AI solutions optimized for mobile platforms and driving transformative change across industries.

With a proven track record in mobile app development, Flexify Solutions seamlessly integrates cutting-edge AI technologies to create intelligent solutions that resonate with users and drive success.

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E-Business

Global Mobile Banking Malware Grows 32% in 2023

Published

3 hours ago

May 8, 2024

Chike Onwuegbuchi

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Kaspersky has released its annual Financial Threats Report for 2023, offering a detailed analysis of the evolving financial cyberthreat landscape.

The report reveals significant increases in mobile banking malware and cryptocurrency-related phishing, signaling growing threats to digital financial assets.

The previous 12-months has witnessed a substantial rise in the number of users encountering mobile banking Trojans, with attacks on Android users surging by 32% – contrary to 2022.

The most prevalent banking trojan was Bian.h, accounting for 22% of all Android attacks. Geographically, Afghanistan, Turkmenistan, and Tajikistan recorded the highest share of users encountering banking Trojans, with Turkiye leading mobile banking malware attacks, with almost 3% of users affected (2.98%).

While the number of users affected by financial PC malware saw an 11% decline in 2023, Ramnit and Zbot were identified as the predominant malware families, targeting more than 50% of affected users. Consumers continued to be the primary target, comprising 61.2% of all attacks.

In 2023, financial phishing remained a significant threat, accounting for 27.32% of all phishing attacks on corporate users and 30.68% on home users. E-shop brands were identified as the top lure, with 41.65% of financial phishing attempts.

Additionally, PayPal phishing represented 54.78% of phishing pages targeting electronic payment system users. The report also highlighted a 16% year-on-year growth in cryptocurrency phishing, with 5.84 million detections in 2023 compared to 5.04 million in 2022.

E-shop phishing was identified as the most prevalent, recording 41.65% of all financial phishing pages. Amazon emerged as the most mimicked online store, accounting for 34% of phishing attempts, followed by Apple at 18.66% and Netflix at 14.71%. PayPal was the most targeted payment system, with 54.73% of attacks.

Cryptocurrency-related phishing and scams continued to grow, with Kaspersky preventing 5,838,499 attempts to follow cryptocurrency-themed phishing links – a 16% increase on 2022. Scammers mimicked cryptocurrency exchanges and offered coins in the name of large enterprises like Apple.

“Money has always been a magnet for cybercriminals, and a substantial portion of malware attacks are financially motivated. The surge in mobile malware witnessed last year highlights a concerning trend in cybercrime.

“With the emergence of new and aggressive malware strains, attackers are evolving their tactics to target mobile devices more aggressively. This underscores the imperative for individuals and businesses to maintain heightened vigilance, update protective measures, and fortify device security accordingly,” commented Igor Golovin, a security expert at Kaspersky.

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E-Business

Payment Link Integration as Growth Driver for E-commerce Businesses

Published

3 hours ago

May 8, 2024

Ugo Onwuaso

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The African e-commerce market grossed USD 277.1 billion in 2023 and is projected to reach USD 939.8 billion in 2023. However, with a global cart abandonment rate of 70%, many of which are related to payment issues, there is a clear need for ecommerce businesses in Nigeria and beyond to provide seamless and efficient transactions to increase their revenue and scale. An effective payment solution for e-commerce businesses is payment link integration.

Payment link integration emerges as a powerful tool for e-commerce businesses to facilitate payment in a convenient and streamlined way. This SeerBit article delves into what a payment link is, how it works, and its benefits for your ecommerce business.

What Is a Payment Link?

A payment link is a unique, shareable URL that directs the customer to a secure payment page where they can make payment for their purchase. This method ensures a seamless and streamlined payment process for customers, particularly removing the need for a physical card or a card terminal. A business can generate this link for any specific transaction and send it directly to the customer through one of several possible channels (email, social media, SMS, etc.).

Payment links make payments convenient for both businesses and customers. Even e-commerce businesses without a website can receive payments online with a payment link. For e-commerce businesses with websites, online payment link integration allows them to boost sales by selling their products on other platforms beyond the business’ website.

Here’s How Your E-commerce Business Benefits from Payment Link Integration
Implementing payment links in your e-commerce setup can offer several advantages that streamline the purchasing process for you and your customers. Here are some reasons why you should integrate payment links for your e-commerce business:

Customer Experience and Convenience
Payment links provide a convenient way for customers to complete transactions without having to navigate through a complex checkout process. This improves the customer experience during shopping as they can pay with ease. With just a click on the payment link, customers can quickly and easily make a purchase, reducing the likelihood of cart abandonment.

Flexibility
Payment links offer your business flexibility in receiving payments, as they can be customised for different types of transactions. It supports multiple payment methods, such as credit/debit cards, digital wallets, bank transfers, etc., allowing you to cater to your customer’s preferred payment method. Consequently, you have more successful transactions and an increased customer satisfaction level.

Improved Cash Flow
With payment links, the speed and efficiency of payments increase. Consequently, this helps to improve your business’s cash flow. The accompanying ease of payments also means that customers are more willing to part with their money, thereby boosting your bottom line.

Security
Payment links are typically hosted on secure payment gateways, ensuring the safety of sensitive customer information during transactions. By leveraging trusted payment providers and encryption technologies, you can instil confidence in your customers and protect their data from unauthorised access.

Reduces Payment Processing Error
Payment link ensures efficiency in the payment process, leaving little room for processing errors. It also ensures that customers don’t have to manually type in their payment information, hence cutting out the risks of human errors, such as wrong billing address or credit card information in the payment process.

Mobile-friendly
As mobile commerce continues to grow, having a mobile-friendly payment solution is crucial. Payment links are inherently mobile-friendly, allowing customers to complete transactions directly from their smartphones, whether they’re on the go or at home.

Tracking and Analytics
Payment links often come with built-in tracking and analytics features that provide valuable insights into customer behaviour, transaction trends, and sales performance. By analysing this data, you can make informed decisions to optimise your ecommerce strategy and maximise revenue.

How To Create a Payment Link for Online Payment
Creating a payment link to receive online payment involves the following steps:

Choose a payment gateway provider
The first step is to partner with a reliable payment gateway like SeerBit that offers payment links as part of its service. Read our blog post on what to consider when choosing a payment provider to help you make the right choice. A few factors to consider are your business needs, security, compatibility, and pricing structure. SeerBit easily checks all the boxes.

Create a SeerBit account
Once you’ve decided on SeerBit as your payment gateway provider, the next thing is to create your SeerBit account. This is a straightforward process that involves providing your business’ information and completing the KYC process for compliance.

Access and set up the payment link feature
SeerBit offers payment links as a part of its service. Once you’re logged in, you can create a payment link in your dashboard which you send to your customers. This link works for both one-time and recurring payments.

To set up your payment link, go to “Payments” on your dashboard, click on “Payment Links,” then “Create Payment Link” and fill in the required details. A link will be created afterward which you can send to your customer via email, messenger apps, social media, invoice, or QR code.

Conclusion
By integrating payment links into your ecommerce business, you make payments very convenient for your customers and considerably improve your customer satisfaction. SeerBit payment link offers you an easy payment collection process while allowing you to cater to your customers’ payment needs. SeerBit also uses the best security tools and the latest encryption and tokenization technologies to ensure the security of transactions and customer payment information.

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