Grace Ashiru
The success of fintech companies is being fueled by a number of trends, including increasing smartphone ownership, declining internet costs, expanded network coverage, and a young, fast-growing, and rapidly urbanizing population. African fintech is the fastest-growing start-up industry in Africa, raising over US$1,3 billion in 2021 alone.
With its current rising trajectory, African fintech can be well placed to quickly improve Africa’s global competitiveness through an increase in the exporting of fintech services abroad. African fintech has a big impact on day-to-day living on the continent.
There are difficulties on these productive soils. The rise of financial inclusion in Africa is being stifled by regulatory uncertainty and regional differences.
Due to this, the continent’s fintech industry is requesting the creation of a Pan-African regulatory agency to create comprehensive regulatory guidelines for regions rather than for individual nations.
With the current emphasis on: some governments and the private sector continuously seek 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 influenced by its rules.
Anti-Money Laundering Scrutiny – More regulatory authorities are requiring compliance with this, and businesses who don’t comply are being punished globally. To prevent the facilitation of fraudulent, terroristic, or other unlawful acts, it is necessary to verify the information that has been obtained from the customer. This is supported by additional procedures like Know Your Customer.
Consumer centricity: To prevent consumer exploitation, fintech must be careful in educating consumers, particularly on the effects of previously unimaginable services and goods.
Data privacy and security must be protected since stored personal customer data is vulnerable to hackers. 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 list of the top 100 fintech ecosystems and account for the majority of the continent’s fintech start-up investment.
The nations represented by the aforementioned four cities have made substantial 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 they are, these modifications have a negative influence on all phases of the customer relationship lifecycle, making them prohibitive to the success of African fintech.
