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From innovative apps to digital startups, the financial technology space is a hive
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of activity.
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How can Africa unlock the potential of its fintechs?
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Let's find out in the Blue Space.
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My name is Tawoma Koko and I look after Transational Banking for All Our Markets.
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My name is Abdul Hakeem Ibrahim.
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I'm the founding member of FinSprint Limited and also the Chief Operations
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Officer.
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What's on your playlist at the moment?
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It's a mix.
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Black Radio, from the Gaspar Project.
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Where do you get up and go from?
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I think Humble, Kendrick Lamar.
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Welcome back to The Blue Space, brought to you by Standard Bank Corporate and
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Investment Banking.
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I'm Joanne Joseph, and I'm joined today by Thabo Makoko, Head of Transactional
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Banking at Standard Bank CIB,
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and Abdul Hakim Ibrahim, Founding Member and COO at FinSprint.
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Welcome to you both.
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Lovely to have you with us today.
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So, Thabo, I'm going to start with you.
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Give us a sense of what growth you've seen taking place in the African fintech space
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in recent times, Thabo.
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Thank you, Joanne.
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We've seen tremendous growth on the continent, largely influenced by high
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mobile penetration,
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more than 50% penetration in the continent.
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We've seen regulatory challenges and policies that have been creating the
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environment for fintechs to
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thrive.
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We've also seen a lot of investment coming through, creating the
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space for fintechs to think about expanding products and solutions.
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And of course, We've seen a high adoption on the continent of some of these
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solutions that have come through from
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fintechs.
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And when I think about how this has evolved over time, it started as a P2P
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environment.
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And we've seen an evolution into micro-lending capability, other forms of
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payments,
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P2B payments, and also as insurance products as well as wealth products.
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But we're also starting to see even B2B capability coming through.
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So there's a tremendous number of opportunities that have come through on
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the continent as reflected in the revenues that are continuing
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to grow, as well as future prospects that are looking positive.
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Talbot, that's sounding really, really positive.
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So, Hakeem, let me ask you, what does the landscape look like from FinSprint's
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perspective?
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Thank you, Joanne, for having me.
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It's wonderful to be here.
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So from FinSprint's perspective, we're seeing the landscape more or less of a
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landscape.
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and more of a digital gold rush.
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So from our point of view, we are seeing that the African fintech space is not just
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growing, it's
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actually sprinting forward, moving forward.
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And I could think up of many examples, but if you look at the digital payment space,
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it's
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growing tremendously.
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And FinSprint is a big player when it comes to enterprise automations, and we're
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thriving in that area.
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And again, we're just happy and wonderfully blessed to be part of this
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growth that we're seeing
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in that sector.
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Yeah, it's certainly quite a positive move forward on the continent.
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Thabo, give me a sense of how fintechs like FinSprint are changing the way
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bigger, more established players like Standard
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Bank do business.
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I think in responding to Hakeem's reflection on Gold Rush, naturally, We
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see an opportunity that we need to align to as financial institutions.
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So we've seen a number of big changes coming through as the banks see this as an
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opportunity both to
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partner and to solve for some of the ecosystems better.
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The area where we've seen biggest opportunity for partnership has been
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addressing some of the underserved
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or underbanked parts of our ecosystems and finding more sustainable ways.
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to bringing solutions that actually can work and help them do the things that they
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need to do.
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But to be also more specific, some of the areas where we have seen this particularly
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work is
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changing the way banks prioritize particular products and solutions.
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For instance, banks have to think about API capability, think about open banking
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capability, banking as a service,
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creating more white label solutions so that partnerships, opportunities to
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capture
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scenarios in the market become easily enabled between banks and fintechs.
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This partnership that is continuing to grow is also changing how we as banks are
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prioritizing
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opportunities.
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And of course, some banks have gone to even a greater extent of opening up their
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own digital arms, their
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own digital fintechs or buying fintechs.
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So this landscape demonstrates that as banks, we've had to shift priority against
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this gold rush
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that Hakim was referring to.
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And of course, at the centre, of all of this is the issue of financial inclusion.
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Correct, correct.
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So, Hakeem, FinSprint has worked very closely with Standard Bank in East Africa,
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particularly on the development of the CargoPay platform.
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Just tell us a little bit about CargoPay.
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Give us a sense of how fintechs like yours are driving transformation, sustainable
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growth, and financial inclusion in East
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Africa, and of course, across the continent.
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Thank you.
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I get excited about CargoPay.
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whenever I get the chance to speak about it because of the impact it's having in
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the trade ecosystem.
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CargoPay solves and continues to solve unique problems that we're seeing within
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the port
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ecosystem and also trade at large.
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So one of the things that we were solving for is ensuring that we have a platform, a
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system that
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allows traders to transact and interact with the ports.
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24-7, 365 days.
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What we were targeting is to ensure seamless trade between different
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currencies, enabling countries
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that are part of that ecosystem within East Africa to seamlessly operate as
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though they are in Mombasa, at the port of
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Mombasa.
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And I get very excited when I see and talk about it for those reasons, but
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also we're seeing additional challenges that we are solving for.
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For example, huge, huge backlogs when it came to actually transaction times.
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We've been able to actually improve and cut down on the transaction times,
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ensuring real-time visibility for
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customer transactions, real-time resolution and reconciliation of those
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transactions, and
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also release of cargoes.
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To also add on to that, I think what CargoPay has also done for the port
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community.
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is ensure that we have streamlined supply chain across that ecosystem.
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And it's not just about moving money, it's about moving industry forward and
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providing the relevant
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infrastructure for that ecosystem to grow and thrive.
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When you're talking about inclusion, we've seen the system provide access to
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traders in far-flung places.
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who've been transacting with the port of Mombasa.
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Such places such as the DRC, Rwanda, Uganda, all transacting
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from the comfort of their offices and homes.
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So tremendous impact, tremendous transformation.
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And I think cargo pay is something to watch.
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It sounds like there's a wonderful synergy there.
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And Thabo, you spoke about how fintechs are driving sustainable growth as well.
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For that to happen effectively, we know we need purposeful digital transformation
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strategies.
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Which African countries are doing this well, in your opinion?
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It's a good question, Joanne.
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Look, we've had a number of countries do fantastic things in this space.
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It'll be difficult to mention all of them, but I'll just give a brief snippet.
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When I look at the continent, certainly markets like South Africa, markets like
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Kenya,
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Nigeria, Egypt.
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and Ghana have been really instrumental in driving this digital adoption, digital
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change.
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In Kenya, I call Kenya the mobile payments or the money, a mobile money
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trailblazer.
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and how they really thought about mobile money first, or digital first as a way.
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Nigeria becoming one of the biggest financial tech hubs on the continent.
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Egypt thinking through how the digital adoption has grown.
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More than 60% of the Egyptian population is digitally enabled.
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You can look at other markets like South Africa that have actually focused around
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infrastructure, policy and frameworks that enable
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digital adoption and building some of these ecosystems.
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There are many such examples, Joanne, that I can quote, that have actually translated
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into this.
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One of the most interesting things to look at as well is the amount of funding that
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is actually spread across the
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continent.
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You'll see that Southern Africa, East Africa, with Kenya being the primary
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source, and West Africa with Nigeria being the primary country,
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is actually the leading countries that are actually capturing.
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most of the funding that goes into the space.
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That's fascinating.
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Tapu, what are African governments currently doing to create an enabling
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environment for fintechs?
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And what more do you think they can do?
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Sure.
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Look, I mean, there was a time and place where maybe fintechs would say not enough.
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But I say there was a period that was required where governments need to go into
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their own sense-making.
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What does this all mean?
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What does this mean?
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And how do we...
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continue to fulfill our obligation as a government or as a central bank while this
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is actually going on.
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I mean, if you think about it, if you are a central bank governor, one of your
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responsibilities is money supply.
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How do you begin to do your work when the money is actually digital or a digital
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currency?
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Your traditional tools for money, monetary policy, are not fit for purpose in that
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world.
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So you now need to adapt and think through that.
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So we've seen It's been a long road, but we've seen governments come to the table.
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And there are many examples on the continent, including creating sandboxes
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for many players to come and participate and pilot
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and test their ideas, coming up with more fit-for-purpose policies, thinking about
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how to
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protect against cybersecurity and cyber fraud, how to think about enabling digital
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IDs, as an argument's sake,
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or even digital currencies.
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So there's been a lot that governments have been doing.
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in creating this environment for fintechs and banks and other partners to thrive and
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stakeholders to thrive.
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What I think is important is all of the things that I've mentioned that
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governments have been looking at
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are really focused inward, in the country, in Kenya, in South Africa, in Ghana.
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But we need to start thinking about some of the opportunities that can be enabled
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on the cross-border side.
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Remittances is a big growing area.
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The free trade agreement talks about free movement of people and goods.
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But we know that for that to happen there must be a free movement of money.
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We must simplify the cross-border space to enable all of these great opportunities
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and ambitions
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of the continent to be realized.
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So one area that governments need to start thinking about is simplifying those
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corridors of movement of people and goods
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to enable trade on the continent to thrive.
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Hakim, give me your take on this.
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I mean from your perspective, how can governments and banks create that space?
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that Thabo is talking about, in which the fintech ecosystem can grow across the
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continent.
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I like Thabo's take.
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I think he's captured a lot of the things that are on my mind.
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But if I was to give you my take, governments, fintech and the banks, that's
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a winning trifecta.
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And I think we just need three ingredients in the mix.
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Clarity when it comes to regulation.
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so that it makes it easier for us to play across borders.
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Africa is basically trading with each other and we would like to make it
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seamless, less complicated
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and easy for everyone to do, but we need to pass through those different regulatory
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environments.
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So if we can have that harmonized, we're good to go.
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The second thing is robust infrastructure.
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Thabo has clearly said banks, government is focused on ensuring that the level the
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playing field by
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providing infrastructure, open banking, APIs, to enable fintechs to be able to do
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what they do best, which is
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innovate and provide agility to the market and allow the market to speak in a
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language that it understands, which is
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money, universal.
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And last but not least, the third thing is genuine cooperation and
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collaboration between banks, fintechs, and government.
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As I said, I like dancing with Standard Bank and we should continue dancing.
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I take it you agree with that.
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Absolutely.
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Well, lots more to talk about on this exciting topic.
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But unfortunately, we have run out of time for this episode.
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Thank you so much for joining us today.
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And thank you to our guests, Abdul Hakim Ibrahim, CEO of FinSprint, and Thabo
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Makoko, Head of Transactional
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Banking at Standard Bank CIB.
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Thank you both for sharing these fascinating insights with us today.
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From me, Joanne Joseph, and the rest of the Blue Space team, it's thank you and
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goodbye.
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Visit www.standardbank.com forward slash bluespace to find out more about the blue
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space.
