Is Africa’s Financial Industry Ripe For Digital Disruption?

(Last Updated On: )

Daniel Monehin

Technology has the power to drive real, impactful and inclusive change, particularly in the provision of financial tools that allow greater numbers of people to be economically active and part of the financial mainstream, writes Daniel Monehin, Division President: Sub Saharan Africa and Head of Financial Inclusion for International Markets at Mastercard.

The financial industry is at a tipping point: advancements in technology and increased uptake of mobile have seen the sector increasingly move to a world beyond cash, where the potential to create solutions that make payments faster, simpler and safer than ever before is immense.

Digital disruption in the financial service industry is inevitable, but is Africa ripe for disruption?

Research carried out by Deloitte on leveraging digital in financial services in Africa shows the continent is crying out for disruption – however, this will require waves of innovation. The research reveals that the first wave – mobile money – is paving the way for future innovations.

According to the World Bank, mobile money services contributed to deepening financial inclusion in sub-Saharan Africa from 24 percent to 34 percent between 2011 and 2014. As mobile penetration continues to grow on the continent, the impact of mobile payment solutions on fostering financial inclusion will also carry on rising.

The second wave of disruption is leveraging the innovative technologies from the first wave, while the third wave is platforms –to facilitate the convergence and aggregation of financial services.

Developing strong partnerships with players in the public and private sector, ranging from mobile network operators to fintech companies, and harnessing tech capabilities such as data analytics and cloud technology, are the key to embracing these waves of change and implementing solutions that meet current and future needs.

Africa is undoubtedly a continent of both challenge and opportunity: while its people remain hindered by a lack of inclusion – the fact that only 34.2 percent of adults have an account serves as stark testament to this – governments and companies are increasingly working to ensure that this statistic is brought down and that all citizens benefit from more accessible, effective and secure solutions.

In pursuit of this ideal, Mastercard has dedicated extensive resources to partnering with market leaders and developing solutions that not only meet the needs of the continent’s citizens now, moving ahead into the future too. There are a number of tools that Mastercard has rolled out across Africa in the last few months that have already begun to make a tangible difference in people’s lives.

Perhaps the biggest example of using technology in order to drive real and meaningful change in Africa is Masterpass QR, the latest enhancement to Mastercard’s Masterpass digital solution. Masterpass QR addresses challenges with the acceptance of electronic payments in micro, small and medium enterprises.

Masterpass QR has proven to be a game changer for MSMEs – widely recognised as core engines of development and growth in Africa and other emerging market economies – and consumers alike.

It removes the dangers of carrying cash and guarantees the security and simplicity of mobile payments, illustrating in a discernible way the capability technology has in meeting needs at all levels of society. It is expected that Masterpass QR will reach 100 million customers by 2020, truly showing the ability of mobile to connect and empower.

In line with bringing greater numbers of Africans into the formal financial fold, Mastercard has prioritised building robust partnerships in the public and private sector, from governments to banks and developers, in order to develop resilient solutions and tools that ensure the widest reach.

There is an ever-increasing emphasis being placed on conceptualising and implementing technology that drives positive growth and momentum. This is one of the key pillars of how Mastercard does business and what drives the company to keep delivering solutions that drive widespread financial inclusion through the use of smart technology that impacts and helps those citizens who require it most: the previously excluded, unbanked and underserved.

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