Most companies are trying to predict what’s next in African fintech and failing. Six months ago, we decided we’d do something about this problem.
We got together with Finextra, the leading fintech publication in the world and the people on the bleeding edge of African fintech to put all their big ideas about the industry in a digestible compendium that serves as a guide for where fintech is headed on the continent.
In our latest whitepaper with Finextra, “The Future of Fintech in Africa, 2023”, experts from Kora, Finextra and seven other organisations analyse developing patterns that are changing the financial technology sector in Africa and present a comprehensive analysis.
From the game-changing possibilities of Artificial Intelligence (AI) to the revolutionary effects of Blockchain and cloud technologies on cross-border payments, the ideas in this report help businesses and investors be several steps ahead of fintech trends.
Here are a few takeaways from the report.
1) What’s the key to an Africa with no payment borders?
The key is collaboration between regulators, innovators, and legacy financial institutions. Even though much of the work has been done by the Pan-African Payment and Settlement System (PAPSS) and fintech like Kora, the three groups mentioned above must be in sync to deliver a seamless payment experience across the continent.
2) Artificial intelligence is gaining traction in Africa, and South Africa is leading.
Since the Covid-19 pandemic, there has been an increase in the number of companies focused on AI. Countries such as South Africa, Nigeria, Egypt, Kenya, Morocco, and Ghana have emerged as pioneers in AI development. Their success can be attributed to their focus on the technology sector and their investment in data collection, privacy, infrastructure, and governance. However, South Africa is way ahead of others. For context, out of the 2360 AI-focused companies currently in Africa, 726 are in South Africa. The remaining 1634 are spread out between the rest of the countries.
3) Legacy infrastructure prevents organisations from migrating to cloud.
Even though cloud adoption has accelerated since the Covid-19 pandemic, small to medium businesses have fared better when it comes to cloud adoption and adapting their processes, particularly because larger organisations are not flexible in comparison and remain lumbered with legacy infrastructure. According to some research, it takes longer, about five to ten years, for big firms to make the transition to cloud computing. It predicts that large firms will spend more on the cloud over the medium term to 2025.
4) Internet connectivity in Africa is still a work in progress.
As of 2022, according to the International Telecommunications Union, only 40% of the African population was using the internet, in contrast to the global average of 66%. The reason for this is infrastructure challenges, the associated costs of improving it, and difficulties in computer literacy among the population. Some of the plans currently in place to increase connectivity include the deployment of fibre-optic cables, the expansion of mobile networks, the provision of affordable devices, and the establishment of public Wi-Fi hotspots.
Get the complete picture of what’s driving the ever-changing nature of fintech in Africa; download the Future of Fintech in Africa, 2023 report here.
At Kora, our mission is to connect Africa to the world and connect the world to Africa via payments. For startups and businesses accepting money in and from Africa, we provide All The Support You Need™️ to start, scale and thrive on the continent. Visit www.korahq.com to see all the ways you can grow with Kora.