African fintech raised over $1.3 trillion in 2021 alone, making it the continent’s fastest-growing start-up sector. This success was fueled by a number of trends, including rising smartphone ownership, falling Internet costs, expanded network coverage, and a young, rapidly expanding, and urbanizing population.
According to McKinsey & Company, African fintech has a big impact on daily life there, and given its rising trend, it may be well-positioned to quickly boost Africa’s global competitiveness through an increase in the export of fintech services.
However, McKinsey & Company noted that these favorable conditions are not without drawbacks.
It stated that regulatory ambiguities and country-specific differences act as a roadblock to the expansion of financial inclusion in Africa, and that as a result, the continent’s fintech industry has called for the creation of a Pan-African regulatory body to establish comprehensive regulatory policies for regions rather than for individual nations.
It was found that the following areas are now being prioritized by several governments and the private business sector in their ongoing efforts to provide regulatory policy frameworks for firms, customers, and economies: Fintech and digital-only banks are governed separately from the traditional financial system but are impacted by its rules; Money Laundering Prevention There is a worldwide crackdown on corporations that are not in compliance, and more regulatory agencies are putting increasing pressure on companies to comply.
In order to prevent the facilitation of fraudulent, terroristic, or other criminal acts, it was stated that this necessitates the verification of information obtained from the client, supplemented by other procedures like Know Your Customer.
Others include consumer centrism—fintech must be cautious in educating consumers about the effects of new services and goods, safeguarding them from being taken advantage of; privacy and data security—stored personal consumer information is vulnerable to cyberattacks. Companies in the fintech industry are required to conform and have the required security systems and policies to protect sensitive data.
Four sub-Saharan African cities, Johannesburg, Nairobi, Lagos, and Cape Town, are featured in the Global Fintech Index of 2020, which includes the top 100 fintech ecosystems. These cities receive the majority of the continent’s funding for fintech start-ups.
It claims that the nations represented by the aforementioned four cities have made great progress toward regulatory frameworks intended to safeguard stakeholders. While certain approaches to laws are universal across nations, others are specific to each market’s difficulties. What is certain is that these policies are evolving quickly as technology availability enables this sector to grow considerably.
No matter how big the fintech, according to McKinsey & Company, these changes make it impossible for fintech to succeed because of the expense and/or inconvenience they cause because they affect every stage of the customer relationship lifecycle.
It claims that the nations represented by the aforementioned four cities have made great progress toward regulatory frameworks intended to safeguard stakeholders. While certain approaches to laws are universal across nations, others are specific to each market’s difficulties. What is certain is that these policies are evolving quickly as technology availability enables this sector to grow considerably.
No matter how big the fintech, according to McKinsey & Company, these changes make it impossible for fintech to succeed because of the expense and/or inconvenience they cause because they affect every stage of the customer relationship lifecycle.
Bizzamm, one of the four African cities included in the top 100 Global Fintech Index, is from South Africa, the report added. Its clients can automate their business processes with the use of the user-friendly, intuitive, and reasonably priced tool known as Bizzamm, which also satisfies most (if not all) of the regulations in effect at the time.
