Why lenders need to focus on automation and Nigeria dominates African FinTech in Q2

Top Story of the Week

The digital race – How automation can improve efficiency and customer experience around lending - Improving the customer experience has become one of the biggest priorities for financial services. In fact, 63% of firms place customer experience as their number one focus as they try to meet the evolving demands of their customers. Lending is one area of finance where the fight to provide the best customer experience is really heating up. Many have even dubbed it as the next major battlefield.

Read the full story?here.

Research highlight

Nigeria dominates African FinTech with a 42% share of deals in Q2 2023

?Key African investment stats in Q2 2023:

• African FinTech deal activity reached 59 transaction in the second quarter, a 31% drop YoY
• African FinTech companies raised a combined $189m in Q2, a 64% reduction from the same period in 2022
• Nigeria was the most active FinTech country in Africa with 25 deals, a 42% share of deals

In Q2 2023, African FinTech deal activity witnessed a decline of 31% compared to the previous year, with a total of 59 funding rounds completed. African FinTech companies collectively raised $189m during Q2 2023, marking a significant 64% decrease compared to the funding raised in Q2 2022. Africa’s general deal activity for all sectors reached 306 deals in Q2 2023, down 34% from Q2 2022 indicating that FinTech has been slightly more resilient compared to other sectors.

TymeBank, a digital retail bank based in South Africa, had the largest FinTech deal in Africa during Q2 2023, after raising $77.8m in their latest pre-Series C round, led by Tencent. With the new funding, Tyme intends to accelerate its operations in South Africa and the Philippines (where it operates GoTyme Bank, a new digital bank), and plot its expansion across Southeast Asia. The company intends to close its Series C funding later in the year. According to David Moore, principal of funds and co-investments at Blue Earth, Tyme's retail partnership model is described as "innovative" and facilitates "affordable access to first-class banking products for all consumers, including the most vulnerable or those living in remote locations." In January, Tyme made the decision to utilize Mambu's core banking technology for GoTyme Bank and other future banks operating in the Asian region.

Nigeria was the most active FinTech country in Africa with 25 deals, a 42% share of all transactions. Kenya was the second most active with 13 deals, a 22% share of total deals and South Africa was third with seven deals.

PayTech was the most active FinTech subsector in Africa during Q2 2023 with 16 deals, a 27% share of deals. African total transaction value in the payments technology market is projected to reach $146bn in 2023. African total transaction value is expected to show an annual growth rate (CAGR 2023-2027) of 16% resulting in a projected total amount of $265bn by 2027.

Read more of our research?here.

Weekly FinTech deal roundup

RegTech shows its strength as it leads this week's 28 FinTech deals

RegTech proved popular this week in the dealmaking world, accounting for seven of the total 28 deals completed.?

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RegTech news

• The Impact of MiCA on the EU’s Crypto Landscape –?The forthcoming Markets in Crypto-Assets Regulation (MiCA) aims to standardise the regulatory landscape for crypto-assets within the European Union (EU). This is particularly significant for crypto-assets that do not currently fall under existing financial services legislation. My Compliance Office (MCO) recently explored how companies can prepare for MiCA. Read the full story?here.
• REGnosys and Next Tech Girls unite to battle gender inequality in the tech sector - RegTech firm, REGnosys, and award-winning social enterprise, Next Tech Girls, have announced a promising partnership with a shared goal of addressing the prevalent issue of gender disparity in the technology sector. Read the full story?here.
• Understanding and combating the rising menace of chargeback fraud - Chargeback fraud, an ever-present issue affecting businesses of all kinds and sizes, results in losses totalling to billions annually. The surge in eCommerce has coincided with an increase in such fraudulent activities, and this alarming trend is expected to continue. Read the full story?here.

Don't Miss Out - Global RegTech Summit USA will be hosted on 28th September 2023!

Don’t miss the largest RegTech event where compliance leaders converge. Secure your place for our second edition in New York and shape the future of RegTech. Find out more?here.

InsurTech news

• DistriBind: Powering data visibility for competitive advantage in the insurance sector - The significance of data visibility in the insurance sector is often underestimated. For companies hoping to maintain a competitive edge, robust data monitoring and management are critical, especially given the sheer volume of data they handle. Recognising this challenge, distriBind offers an innovative visibility solution that is setting new standards in the industry. Read the full story?here.
• Akur8 partners with Cypress P&C to enhance insurance pricing prowess -?Akur8, a trailblazing insurance pricing solution utilising transparent machine learning, and Cypress Property & Casualty Insurance Company (Cypress P&C), a well-established insurance firm offering a variety of innovative insurance products, have joined forces. Read the full story?here.
• Navigating extremes: The role of customer experience in a changing climate - We’ve been living through periods of extreme conditions for the past few years, with global pandemics, wildfires, flooding, ice storms, and the looming possibility of international conflict becoming alarmingly frequent. While we could easily brush these years off as a statistical anomaly, data analysis presents a starkly different narrative. It suggests that we are transitioning towards accepting these extremes as our new reality. Read the full story?here.

Don't Miss Out - Global InsurTech Summit USA will be hosted on 26th September 2023!

After five years of continued success and unprecedented demand from US insurers and InsurTech founders, we are bringing our flagship event to New York! Find out more?here.

WealthTech news

• WealthTech firm GBST expands reach with Advice Intelligence acquisition - GBST has acquired Advice Intelligence, an award-winning provider of an end-to-end financial planning software solution. Read the full story?here.
• JPMorgan’s Chase set to disrupt European online banking landscape - JPMorgan is set to broaden its horizons by introducing its online bank, Chase, to Germany and other countries within the European Union. Read the full story?here.
• Giraffe’s impact investing platform secures $10.5m in seed funding –?Giraffe, a New York-based FinTech firm, offers an innovative impact investing platform, aimed specifically at employees. Read the full story?here.

CyberTech news

• Cybersecurity firm Trustmi bolsters payment security with $17m funding - Trustmi, a cybersecurity-focused FinTech firm, today celebrated its global launch, aiming to revolutionise business payment security. Read the full story?here.
• Data governance provider OneTrust secures $150m in new funding - At the heart of the ever-evolving world of data governance is OneTrust, a company known for its innovative approach to data privacy and transparency. Read the full story?here.
• UK and US execs challenged by complex data privacy laws, survey finds?- A survey by Womble Bond Dickinson indicates that approximately half of executives feel very prepared to meet the privacy regulatory requirements in the UK, US and EU. Read the full story?here.

ESG FinTech news

• US Republicans on the offensive against ESG investing and reporting -?US Republicans have unveiled a slew of proposed legislation aimed at curbing the influence of ESG initiatives on financial and capital markets. Read the full story?here.
• How ESG is reshaping US business practices - In the US, the notion of Environmental, Social and Governance (ESG) reporting has been met with widespread approval. Read the full story?here.
• Harnessing FinTech for sustainable power: a guide to Scope 2 emissions reporting - In a world increasingly conscious of the environmental impact of business operations, reporting electricity usage is now a crucial part of corporate responsibility. Compliance with the Greenhouse Gas Protocol demands clear documentation of purchased electricity, a challenge Position Green seeks to simplify with a best practice approach. Read the full story?here.

Other FinTech news

• Leveraging AI for business transformation: Quantiphi’s innovative approach - Approximately 16 million UK residents remain oblivious to the financial risks associated with ‘Buy Now Pay Later’ (BNPL) services, says research from responsible lender, Creditspring. Read the full story?here.
• Checkbook teams up with Zelle for faster and secure financial transactions - Checkbook, a comprehensive push payments platform, has revealed its latest payout option, an alliance with Zelle. Read the full story?here.
• Cash flow challenges undermine growth of UK female-led SMEs -?New research from Bibby Financial Services (BFS) reveals the ongoing challenges for female business leaders in the UK, with 43% claiming to lack the necessary cash flow for growth. Read the full story?here.