Love it or hate it, fintech revolution here to stay
SEE ALSO :New CBK system to identify bank clientsIssue receipts Fintechs allow thousands of businesses in Kenya, Uganda, and Tanzania to view their transaction history and issue receipts. Most fintech innovations permit for payment of low-value card transactions with ease, speed and convenience. Taking a case study of the US, Fintechs raised Sh1.2 trillion ($12.4 billion) in funding- injecting the much-needed boost in the American economy. Fintechs are also changing economies worldwide. Their landscape in Africa has grown at an annual rate of 24 per cent over the last 10 years, fuelled by three main hubs of Kenya South Africa and Nigeria. Recent developments have shown emerging signs of fintech growth in Ghana, Cameroon, Rwanda and Uganda. Kenya hosts around 20 per cent of the entire Sub Saharan African fintech landscape and has a stronger focus on the payments segment. The Kenyan hub is located in Nairobi, home to more than 50 fintechs in Sub Saharan Africa - the main drivers for financial inclusion. Financial inclusion means people and businesses have access to useful and affordable financial products and services that meet their needs that are delivered in a responsible and sustainable way. About 2.5 billion people are unbanked due to barriers such as the cost of services and physical distance to access points. However, recent data shows the potential of technology and innovation to overcome these barriers. G20 leaders such as the IMF, World Bank and other multilateral institutions have called for an improvement in the quality of economic growth to be more inclusive. Development concern They have recognised the benefits of financial inclusion for stability, integrity and inclusive growth - making it not only a development concern but a cornerstone of economic development framework and model. The Central Bank of Kenya policy and regulatory framework allows 23 million people (74 per cent of adults in Kenya) to use mobile services through 90,000 agents and the number continues to grow. The fintech industry is not absent from various challenges. Cyber-attacks are some of the greatest challenges faced by governments and businesses worldwide and given the sensitive nature of the client data that they hold. They are a serious concern about fintech firms, with cybercriminals launching more complex and frequent attacks. The number of major data breaches is also set to increase in 2019. With traditional cyber security methods becoming unsustainable, it may be time to consider deploying dynamic security solutions such as a Moving Target Defence that helps frustrate attacks by constantly shifting the points of attack and robing hackers of the static targets that they are familiar with breaching. Other challenges include retaining human touch in the banking and fintech industry. Fintechs operate a model that often leave clients feeling they are dealing with a faceless entity. Keeping your customers’ needs and experience at the heart of fintechs is paramount. Fintechs should make things easier for the consumer and in a manner friendly to regulators. In fact, technology assists regulatory bodies to work better. -The writer teaches at the University of Nairobi
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