Multiply Group iKhokha

Source: Techcentral.co.za.


Informal markets key to fintech success in SA

Analysts argue that the influx of innovative new financial technology companies into the African market will challenge banks and erode their profit margins. Accenture estimates that over one-third of mainstream financial services’ revenue is at risk due to disruption in the industry from fintech. In a global survey by PwC, 88% of banks, insurers and asset managers view fintech as a threat, with the number rising among African respondents.

However, the real opportunity is for the traditional banking sector to partner with and leverage the highly specialised solutions and on-the-ground work being done by the fintech start-ups. This will allow them to bring new products to previously underserved or inaccessible markets quickly.

Frost & Sullivan estimates that as much as 60% of the adult population in Africa is unbanked, holding back economic growth: according to a study by the International Monetary Fund and MIT, driving financial inclusion has a direct impact on GDP growth across several indicators.

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