The Future of Financial Services
This article is a synopsis of some of the key take-away points from “The Future of Financial Services” panel discussion at SuperReturn Africa in Cape Town on 5 December 2017 with the following panelists: Chijioke Dozie (CEO, OneFi) and Edmund Higenbottam (MD, Verdant Capital). OneFi is an innovative consumer lender in Nigeria, using technology to underwrite, disburse and collect loans.
Edmund and Chijioke expect technology to be the driving force that will shape the future of the financial services industry in Africa. Technology is expected to play a significant role on a strategic level, as well as on an operational level.
In many African countries, the majority of the population remain unbanked. Connecting individual customers to banks, and connecting banks to individual customers has proven to be challenging according to both panelists. Chijioke sees the emergence of apps that make it possible to bank from a smartphone as being effective in providing financial services to those who were previously unbanked. The emphasis seems to be relying less on physical branches, but more on digital channels to reach customers. As a result, it is expected that we will see more partnerships between fintech companies and banks as a means of reaching the unbanked population through effective use of technology. A good example of this is YUP, which is a result of the partnership between Soc Gen and Tagpay (please refer to the next article).
Edmund sees big data as another example of how financial institutions will embrace technology into their business. Big data has significant uses for KYC, loan underwriting and insurance underwriting.
Asked whether he thought mobile network operators and mobile money represented the key competitive threat to traditional financial services players in Africa, Edmund said that he thought in the long-term, “OTTs” (Over-the-top players) such as WeChat and Facebook represent a bigger threat.