The World Bank’s Global Findex financial inclusion study shows that 12% of adults in sub-Saharan Africa have mobile money accounts – compared to just 2% worldwide – and of these 64 million adults, 45% of them have only a mobile money account.
This is a reflection that banks’ traditional models could be under threat unless they adapt and an opportunity exists in revolutionising trade finance and cross-border payments. The International Chamber of Commerce’s (ICC) Bank Payment Obligation (BPO) framework is a step toward enabling this revolution.
Past experiences have shown the continent has the ability to leapfrog more developed practices as new technology over-takes entrenched business practices. Widespread adoption of mobile money solutions points to the potential for systems such as the BPO proposal. Organisations, such as MTN Business – the Information and Communications Technology (ICT) partner of choice for geographic and market expansion, that operate across the continent have a deep understanding of Africa, its challenges and opportunities.
MTN Business has proven, reliable and secure network infrastructure across the continent that financial institutions can leverage on. ICT providers such as MTN Business are well positioned to help banks make that shift.
ICT partnerships can help financial institutions overcome threats to their trade finance business posed by disruptive business models such as mobile money and other industries – including insurance companies moving into the banking space.
The hosting of the ICC Banking Commission Annual Meeting in Johannesburg marked a pivotal moment that could help unlock the potential for economic prosperity on the continent.
‘Potential’ is the operative word as many hurdles still exist to African countries realising their economic promise. For one, Africa may be seen as a single economic region, but conditions and the regulatory environment vary greatly between individual economies. Add to that the enormous infrastructure deficiencies, and it becomes clear that pursuing a view of Africa as a single market still requires considerable effort.
Rapid advances in technology and heavy investment in infrastructure have taken place across the continent, enabling the delivery of services to markets that not only have a need, but a demand to be able to interact and transact.
It is this desire to adopt new technologies – even for the most basic, personal services – that holds such great promise for enabling increased trade across the continent.
The ICC has clearly recognised the need to simplify trade and supply chain finance in order to facilitate economic growth. Its work to establish new standards through the Bank Payment Obligation (BPO) framework is evidence of that realisation.
With investment and footprint in the continent, MTN is ready to partner and set the world ablaze with innovative ICT solutions.
By Mariana Kruger, General Manager for Private Sector at MTN Business South Africa