The Future of Fintech, Banks and Mobile Money in Africa: A Call for Innovation, Smart Regulation and Collaboration.

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In June 2024, I fully attended the Africa Fintech Festival , representing the Tanzania Fintech Association as an esteemed member of the Africa Fintech Network , where I also sit on the board of directors. In attendance was a long list delegates from fintechs and major players including Ecobank, KCB Bank, Safaricom , Creditinfo Group , Tala , SkaleTek , Central Bank of Tanzania, Ghana even Egypt, Flutterwave and PesaKit , to mention a few.

As I think about all this, I am filled with exciting ideas and cautious optimism. The future of fintech in Africa is brimming with potential, yet it requires a delicate balance of innovation, regulation, and collaboration. The journey ahead is fraught with challenges, but the promise of a financial revolution that drives economic growth and inclusion across the continent makes it an adventure worth embarking on. The road may be long and winding, but with each step, Africa edges closer to a brighter, more inclusive financial future.

There was a bunch of other interesting topics and themes which were covered at the event and I will write about sometimes later, Licensing & Regulatory approvals, AI, Ecosystems, Cyber security, Data sharing and Data protection

We don’t compete; we complete each other." – Josephine Ankomah, Managing Director of Ecobank CESA.

Below here, I have meticulously compiled the six key takeaways and captivating insights unveiled at the event, and I am confident you will find them fascinating.

1. Regulatory Sandboxes: Move Fast and Don’t Break anything. "Move fast and break things" – a motto by Marc Zuckerberg that has driven countless tech innovations – stands in stark contrast to the cautious nature of regulators and banks. In the world of finance, moving too fast can lead to catastrophic consequences, it is why banks and central banks don’t move fast. However, regulatory sandboxes offer a glimmer of hope. These controlled environments allow fintechs to innovate boldly yet responsibly, navigating the tightrope between rapid advancement and regulatory compliance. It’s a delicate balance, but one that holds the promise of groundbreaking developments without jeopardising stability of the whole economy.
2. Fintech as masters of Small “Big” things: Fintech’s Secret Weapon.The future of fintech in Africa lies in specialisation. Fintech companies are poised to carve out niches that traditional banks and mobile money operators either overlook or lack the expertise to service effectively. By focusing on these underserved segments, fintechs can offer tailored solutions that drive financial inclusion and cater to the unique needs of diverse communities. Isaac Kamuta, head of payments at Ecobank said fintechs must build on what happens before and after the payment, because payments is not a problem, payments is already well done on most part of the continent. I think there’s No one else more qualified to say this that the man who has led payments in Africa for 20 years.
3. We don’t compete with Each Other, We Complete Each Other: As Fintech and banks, We don’t set out to compete with each other; we are set to complete each other, I noted from a keynote speech by Josephine Ankomah who’s the MD of Ecobank Kenya, This profound statement resonates deeply with the collaborative spirit that is reshaping Africa's fintech ecosystem. In a world where traditional banks and agile fintech could be adversaries, there is a refreshing shift towards synergy and mutual growth. It's a recognition that collaboration, rather than competition, is the key to unlocking unprecedented innovation and inclusivity. It is not just words, Ecobank is directly integrated and work with Temboplus as well as Fingo .
4. Banks and Fintechs: Don’t burn the whole house to kill a Mouse!. Moh Soul, said imagine a bank as a house with a hidden leak somewhere in the basement. Fintechs, with their curious and unorthodox approaches, are like a child who turns the pipe just to see what happens. To manage these children, Ecobank made a bold move to establish a fintech desk in Nairobi Office to service fintech partners, drawing inspiration from the success stories (and challenges) faced as they work with Tembo in Tanzania and Fingo in Kenya, signals a daring yet cautious embrace of this dynamic interplay. Traditional financial institutions are beginning to see fintechs not as threats, but as partners who can help them discover and fix those hidden leaks, leading to stronger and more resilient financial systems.
5. Passporting: The Promise of Cross-Border Collaboration between Regulators: "Passporting" – a term borrowed from the European Union – envisions a future where fintechs can operate seamlessly across African borders with a single regulatory license. This concept, if realised, could revolutionise the fintech landscape, enabling companies to scale effortlessly and innovate across regions. The path to passporting is fraught with challenges, but the potential rewards are immense. Cross-border regulatory cooperation would not only streamline operations but also ignite a wave of growth and innovation that transcends national boundaries. Flutterwave and Onafriq have tried to do this but I am not sure if the regulators of Egypt and Nigeria loved the idea very much.

Final Thoughts & Conclusive remarks.

1. Passporting: Ecobank, Onafriq and Flutterwave should lead this initiative. Passporting is the game-changer Africa needs, enabling fintechs to operate across borders with a single regulatory license. This must be driven by a powerhouse consortium including Flutterwave, GTBank, UBA Bank, Ecobank, and Onafriq, in collaboration with regional bodies like the EAC, ECOWAS, SADC, and the AU. By unifying regulatory standards, we can tear down barriers, spark unprecedented collaboration, and unlock the full potential of African fintech. It's ambitious, it's bold, and it's the future.

"Banks and regulators are terrified of moving fast. Rapid change means punishment for them, so they stay slow and in check. And frankly, that's exactly their problem—but why should they care if only smaller fintechs want them to move faster?"

2. Fintech: will always Move Fast and Break a Few Things: The mantra "move fast and break a few things" is not just a catchy slogan—it's a call to action. While banks and regulators fear rapid change, fintechs must embrace it. Innovation requires risk and a willingness to disrupt the status quo. Regulatory sandboxes offer a safe space for this experimentation, ensuring breakthroughs that propel financial services forward without compromising stability. Fintechs, let's push the boundaries and drive progress as we know most sandboxes are either not functional or they are non existent.

Fintechs should build on what happens before and after the payment, because payments are already well done by banks or mobile money.

3. Expanding the Revenue Pool: Build non payment features which improve participation in the economy by all Africans. I have previously said “payments should be free” which is shorthand for build other revenue generating services beyond payments. Expanding the revenue pool isn't just an economic strategy—it's a mission for inclusive growth. We need to bring more Africans into the financial system, enhancing economic inclusion and making lives better. Moving money is already solved; now, we must focus on what happens before and after payments. By developing new financial products and services for underserved markets, we can create new revenue streams and foster a robust financial ecosystem.