Data laws, infrastructure gaps slow growth in AI and fintech sectors

Startups face data compliance challenges amid rising demand for local AI and fintech infrastructure. [iStock]

Startups in artificial intelligence and fintech are struggling to process growing volumes of sensitive data while meeting local compliance rules, as gaps in affordable, scalable computing capacity persist.

Kenya's Data Protection Act requires personal data to be hosted and processed within the country, but many startups face challenges balancing compliance with the need for fast, data-heavy services like machine learning and digital payments.

"Startups want to grow quickly while following the law, but local capacity often cannot keep up," observed Derrick Gakuu, Co-Founder of SISCOM Tech, a firm that designs and manages secure digital infrastructure.

In response, SISCOM Tech has secured certification as a Data Controller under Kenya's data laws, confirming it can process sensitive data in line with national privacy and security requirements.

The company has also expanded its infrastructure by deploying a new data-centre cluster inside IX Africa's carrier-neutral facility in Nairobi.

The deployment triples SISCOM's computing capacity, providing GPU-enabled racks and low-latency connections essential for processing AI and fintech workloads.

IX Africa's facility, built to Tier III design standards, currently offers 4.5 MW of IT power with plans to expand to 22.5 MW, aiming to meet demand without forcing clients to move data offshore.

"SISCOM's deployment proves local firms can keep data in-country while building digital services that require serious computing power," explained Snehar Shah, Chief Executive of IX Africa.

Kenya's ambitions to strengthen its position as a regional technology hub have increased demand for local data processing capacity, but infrastructure limitations have slowed the adoption of advanced analytics and cloud services by startups and government agencies.

The IX Africa facility draws on Kenya's renewable energy resources, aligning with efforts to lower the carbon footprint of digital infrastructure while providing the computing power required by AI developers and fintech platforms.