While traditional banking institutions across the globe grapple with implementing technological innovation matching that of the fintech sector, Tim Nuy, executive director of Frankfurt-listed Fintech company MyBucks, believes that Africa presents Fintechs with enormous opportunity as it comes without the burden of a legacy of technological structures.
“Fintechs with first-hand knowledge and experience of the continent’s challenges and opportunities are already making their mark in terms of successfully banking the unbanked. Here (in Africa), the incredible uptake of mobile phones makes remote locations and lack of infrastructure a virtual non-issue.”
“In a similar way that technology disrupted the newspaper and music industries, and more recently the bed & breakfast (B&B) and taxi industries through the likes of Airbnb and Uber respectively, so too is technology fundamentally changing our relationship with money,” he comments.
Nuy says that despite the fact that the traditional finance sector is earmarking technology for investment, it remains to be seen whether these large institutions can move swiftly enough and advance towards automation to keep ahead of the wave of change.
“Some of the larger global institutions have decided that the acquisition of these fintech players is the way to go. But then what? Even if they manage to keep up and opt to join the fray, increased automation will ultimately lead to a decline in branch numbers and people employed by the financial services sector.”
“That being said, when it comes to the majority of Africa, I see it playing out very differently. Branches might have to be structured differently and banking personnel enabled to use and implement technology better, but the continent is far from saturated in the financial services aspect,” Nuy explains.
So in the end, Nuy says that it really comes down to traditional banking institutions shaping up or shipping out – like it or not, “fintechs are here to stay.”