E-Financial
African Fintechs Seek Comprehensive Regional Regulatory Policies
Fintech businesses have called for comprehensive regulatory policies for regions rather than countries. Fintech industry watchers and researchers say this is the fastest-growing start-up industry in Africa and is fuelled by several trends, including increasing smartphone ownership, declining internet costs, expanded network coverage, and a young, fast-growing, and rapidly urbanising population.
They also say Fintech could be poised to advance the continent’s global competitiveness by exporting services globally.
At the same time, researchers point out that there are challenges, notably regulatory uncertainties and differences between countries. This has led to a general call from Fintechs for a pan-African regulatory body to define comprehensive regulatory policies for regions rather than countries.
According to McKinsey & Company, certain governments and the private business sector are working on providing regulatory policy frameworks and the focus is on:
- Regulations – digital-only banks and Fintech are influenced by- but independently regulated from the traditional financial system regulations.
- Anti-Money Laundering Scrutiny – more regulatory bodies are insisting on compliance herewith, worldwide there is a clamp down on non-compliant companies. This requires the verification of information received from the client to avoid fraudulent, terrorist, or other illegal activities being facilitated, supported by other processes such as Know Your Customer (KYC).
- Consumer centrism – Fintech must be vigilant in consumer education, especially the consequences of services and products that did not exist before, protecting the consumer from being exploited.
- Protection of Privacy and Security of Data – stored personal consumer information is susceptible to cyberattacks. Fintech companies must comply and have the necessary security systems and protocols to secure sensitive data
According to the Global Fintech Index of 2020, which lists the top 100 Fintech ecosystems, four Sub-Saharan African cities feature and include: Johannesburg, Nairobi, Lagos and Cape Town. These cities account for most of the continent’s Fintech start-up funding.
A statement from the research firm reads, “The countries represented by the four cities above have taken significant strides towards regulatory systems designed to protect stakeholders. Each country’s approach to regulations shares similarities, while others are unique to the challenges faced in their market. What is definite is that these regulations evolve rapidly as access to technology empowers this market to scale significantly.”
Automation tools are gaining popularity in markets as Fintech businesses look to comply with data management and cyber security regulations.
In August this year, data released by McKinsey showed that payments and mobile wallets from Africa are likely to grow fastest at around 20% per year up to 2025.
The research company added that South Africa has a bigger share of this market at about 40%, other regional markets such as West Africa, including Ghana and Francophone West Africa are also poised for growth of 15% and 13% respectively over the next three years.
Titan Trust Bank has selected Oracle FSS for its core and digital banking technology, it is understood.
The start-up bank recently obtained its license by the Central Bank of Nigeria (CBN).
It’s understood that Temenos and Infosys also competed for the deal.
The shortlist came down to the two most widely installed international core systems in Nigeria, Infosys’ Finacle and Oracle FSS’s Flexcube.
The Nigerian banking sector has seen a great deal of upheaval over the years, with many mergers, start-ups and closures. Flexcube is a well respected name since the late 1990s (the pioneer was Access Bank, now one of the country’s top five banks) and has been a commonly selected platform since then.
The new bank is believed to be one of five to have gained regulatory approval of late (Globus Bank is another).
Local media sources say the new licences stem from the Central Bank’s desire to attract new investments into the sector and better serve the country’s 50 million+ unbanked and under-banked citizens.
Titan Bank is said to be headed by a former executive director of Heritage Bank (which is a Finacle user).
Oracle FSS did not respond to request for comment.
International Monetary Fund (IMF), has appointed Tony Elumelu, Nigerian billionaire and group chairman of Heirs Holdings, owners of United Bank of Africa, to its advisory council on entrepreneurship and growth, convened by Kristalina Georgieva, the fund managing director.
The announcement was disclosed in a statement on Friday.
According to the statement, the IMF advisory council comprises global business leaders, policymakers, and academics dedicated to identifying and addressing regulatory barriers to entrepreneurship.
The IMF said Elumelu will be instrumental in ensuring that Africa’s entrepreneurship is central in policy making.
“Elumelu, Africa’s leading advocate of entrepreneurship and whose Foundation has funded, mentored, and trained over 25,000 African entrepreneurs since 2015, champions entrepreneurship as the engine for the economic transformation of Africa,” the statement reads.
“A self-made entrepreneur, Elumelu’s embracing of entrepreneurship is fundamental to his concept of Africapitalism, his belief that Africa’s private sector can and must play a leading role in the continent’s development, making long-term investments that deliver social and economic value.
“Elumelu will be instrumental in ensuring that Africa’s entrepreneurial potential is central to global economic policy making.”
Speaking at the inaugural meeting of the advisory council on March 26, Georgieva said the appointees would share their experiences on how macroeconomic and financial policies “can provide a supportive environment for innovation, entrepreneurship, and productivity — key ingredients for a thriving private sector and strong economic growth”.
Africa’s Micro, Small, and Medium Enterprises, fintech industry, scaling remittances, and cross-border payments will be the driving forces behind the continent’s digital ballooning payments system, which is estimated to reach $1.5 trillion by 2030.
This is according to a MasterCard-commissioned study by Genesis Analytics, which states that the digital payments economy is growing faster on the continent.
This comes as the World Bank says Sub-Saharan Africa has shown significant growth in financial inclusion over the past decade, much of it driven by mobile money account adoption.
Dimitrios Dosis, president, Eastern Europe, Middle East and Africa at MasterCard, comments: “Africa is filled with immense possibilities, and its people have the potential to shape the global economy in the decades ahead.
“MasterCard remains deeply committed to driving digital transformation across the continent, working closely with entrepreneurs, merchants, banks, start-ups, telcos, and governments. By increasing our investments, expanding innovation, and fostering inclusion, we are helping build a more connected and accessible digital future.”
The payment technology company went on to say as a longstanding technology partner to Africa, its continues to strengthen its commitment to the continent’s digital growth through strategic investments, public-private partnerships, and innovation initiatives that drive financial health and economic growth.
In addition, it says trends in Africa signal a strong shift towards digital transactions, with businesses and consumers increasingly embracing contactless solutions, further accelerating economic participation and financial accessibility across the region.
“For over five decades, MasterCard has worked alongside African governments, businesses, and communities to advance financial inclusion and economic development.
“With Africa projected to host nine of the world’s 20 fastest-growing economies, we are focused on leveraging our expertise and a technology to support the continent’s continued digital transformation.
“Our investments today will help build a more resilient economy for the future,” says Mark Elliott, division president, Africa, MasterCard
By fostering collaboration with key stakeholders, MasterCard says it aims to enhance digital connectivity, expand economic opportunities, and enable millions of people and businesses to thrive in the digital economy.
Titan Trust Bank Selects Oracle FSS for Core and Digital Banking Technology
IMF Appoints Elumelu, Nigerian Businessman to Advisory Council
NCS to Launch Electronic System for Cash Declarations at Airports
IHS Nigeria Hosts Telecom Industry Stakeholders to Discuss Protection of Critical National Infrastructure in Lagos State
Aquaterra Energy Secures Multi-million-dollar well Intervention Contract with Intrepid Energy in Nigeria
Telecom3 days agoAgain, Labour Fumes, Threatens Shutdown of Telcos over Non-Implementation of 15 Percent Tariff Reduction
News3 days agoNNPC Ready to Go to Capital Market for IPO- CFIO
E-Business3 days agoFG Launches Online Visa Approval Centre
E-Business3 days agoQNET Disassociates From Fraudulent Academy in Abuja, Supports EFCC Arrest
Telecom2 days agoIHS Nigeria Hosts Telecom Industry Stakeholders to Discuss Protection of Critical National Infrastructure in Lagos State
E-Financial2 days agoTitan Trust Bank Selects Oracle FSS for Core and Digital Banking Technology
E-Business3 days agoFirm Discovers Sophisticated Chrome Zero-day Exploit Used in Active Attacks
General News2 days agoNCS to Launch Electronic System for Cash Declarations at Airports