As someone that has always been fascinated by technology, I have looked on in amazement at the last 20 or so years. The way technology has enhanced and somewhat taken over our lives. We don’t seem to run our lives, our smartphones now dictate how we consume, engage, communicate, travel and pay for things. Being the owner of an ICT solutions company here in Windhoek I have an extra added interest in apps, new technology and how engaged as a nation we are with this.
However, my interest goes further, as I strongly believe that if we truly want Namibia, and Africa to rise, become fully fledged players on the world stage we need to embrace technology fully. We can and should implement and embed technology, innovations and tech from all quarters to make our lives better and our economy more competitive.
One of the buzzwords in technological innovations and one where we can make or break our economy is Financial Technology, or FinTech for short. FinTech will inevitably become the great equalizer as at present in parts of the African continent more than 50% of the population does not have a bank account. The new technology will allow people to enter the monetary and transactional financial space through their device.
A major reason for the super-fast development of FinTech is that ‘cold hard’ cash is just simply a pain. It’s bulky, dangerous to carry around, it’s unhygienic and you can’t pay for goods and services with cash online. FinTech is everywhere. Just look at internet banking. We no longer stand in line, but carry out EFT (Electronic Financial Transfers), and even something as seemingly simple as Mobile Money is based on complex and very secure technology.
Security and safety of transactions whenever money is involved is of course essential, this remains a challenge. Is it truly safe, do consumers, whether business to business or private individuals feel comfortable taking their financial activities online? So far, it seems they will and have. Customers have embraced the idea of on-demand finance, thanks to mobile and cloud computing. FinTech trends show that people are quite comfortable managing their money and business online. Mobile Money remains the most basic example of the embracing of this new technology.
Overall, the financial technology sector is red-hot, with traditional financial institutions increasing their FinTech investments and competing with start-ups to offer financial services products faster and more efficiently. Another way of stimulating the development of FinTech is through investment. All over Africa we see that major companies are investing in start-up and proven technology. We recently saw Branch from Kenya receive a US$ 70 million second round of funding and Cellulant of Nigeria receiving US$ 47.5 million for further development. These are figures we can only dream of in Namibia to develop technology.
One reason FinTech start-ups remain prominent on investors’ radar is the sheer necessity of the work they do in plugging gaps in financial services in Africa. While in more developed economies, FinTech start-ups focus on disrupting the already existing banking industry, in Africa, we need build the technical infrastructure and systems from scratch. But, these investments will be worth it. We develop our own skills and know-how and once we have proven technology and stimulated FinTech development we can export our knowledge and sell our apps, just like everyone else does. This way we can truly see Namibia and Africa develop further and ‘Rise’.
The fundamental importance of FinTech cannot be underestimated and leads to true empowerment and equality in society. It ranges from powering payments, facilitating savings and most importantly ensures financial inclusion for many people who previously did not have a way into the legitimate banking space in one way or another due to cost or other constraints.
It isn’t pie-in the-sky thinking, this future is not 10 years away, its not even 5 years away, it’s here and it is never going away again. It will change and transform the financial sector locally, regionally and globally. Not just disrupting, but empowering people, nations and economies. I for one hope that we as a nation can and will embrace this FinTech revolution and invest in it.
By Llewellyn le Hané, Director, Green Enterprise Solution