Revisiting Banking Regulations to Break Free from Colonial Legacies in Africa.
The potential of digital banking in Africa is vast.?
Voices like Yustus Aribariho MBA 's that offer invaluable insights into the shifting tides in a rapidly evolving financial landscape are much needed.
Financial institutions can meet consumers’ evolving needs, turning today's challenges into tomorrow's opportunities, by integrating digital tools, reimagining service delivery, and investing in infrastructure.
As the former Regional Head of Digital Banking at 渣打银行 Bank, Africa and the Middle East, Now founder Furaha Financial Yustus had a chat with me in 2020 to explore the dynamic relationship between fintech and traditional banking in Africa.?
"We've deployed nine digital banks in the last 18 months, which has been quite phenomenal."
The discussion spans the #digital transformation brought about by globalization, the acceleration of financial technologies, and the strategies banks must adopt to thrive in this new environment. Such topics have never been more relevant than today, as financial institutions worldwide grapple with maintaining customer engagement and adapting to technological advancement.
Here’s what you need to know;
Yustus highlights a transformative trend in Africa, where digital finance, from #mobile #payments to #cryptocurrencies, has seen rapid adoption. This surge is particularly inspiring in a continent historically underserved by traditional banking.?
The region's embrace of digital banking solutions, accelerated by the COVID-19 pandemic, is set to outpace conventional methods significantly. Yustus argues that the pandemic has catalyzed a revolution in digital tools, pushing African economies years ahead of their anticipated technological progress.
2. Strengthening Financial Inclusion.
One recurring theme of the conversation is financial inclusion. Yustus stresses the importance of developing appropriate financial services not merely offering credit but also providing insurance, savings, and investment opportunities tailored to various needs.?
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This broader approach seeks to enhance economic stability and personal financial health across demographics. With 57 percent of Africa's adult population still underbanked, there's an urgent need for #banks to expand their services through understanding consumer behavior via data analytics, powered by artificial intelligence.
3. Collaboration Over Competition.
Importantly, Yustus dispels the myth of fintech firms as threats, instead portraying them as complementary actors in the financial ecosystem. He outlines how banks can leverage fintech innovation, allowing the latter to solve specific challenges while banks focus on delivering core financial services.?
The collaboration between fintech and conventional banks is not only beneficial it is essential to widening access to financial services across Africa and improving business competitiveness within the continent.
4. Regulatory Challenges and Opportunities.
Addressing regulatory hurdles, Yustus calls for a revision of outdated banking regulations often rooted in #colonial legacies. He argues that such laws hinder the potential for financial inclusion by imposing unnecessary barriers like proof of residence, which many in Africa's informal economies cannot provide.?
Progressive changes in #policy, incorporating technology driven solutions for identity and credit assessment, could pave the way for improved access and trust in financial institutions.
5. The Way Forward.
In Yustus's view, the future of digital banking hinges on embracing technology and fostering ambition. He emphasizes the need for a sustained focus on infrastructure development, such as widespread internet access, and supporting a regulatory environment conducive to digital growth.?
"Technology is enabling us break those bricks and mortar kind of approach, which makes it much cheaper for us to transact."
As digital transformation continues to redefine the financial sector, he encourages professionals and aspiring leaders to remain informed, innovative, and ambitious.
Those who dare to innovate and collaborate will lead the charge towards a more inclusive and accessible financial future.
It is critical to understand how society must adapt to fulfill the promise of a more equitable and efficient financial system.
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