As technological advancements get sophisticated, new possibilities are revealed and humans find more efficient and reliable means of getting things done.
Nowhere is this more evident than in financial technology (fintech) where transactions in the field of business are now being offered at a better and improved level.
Due to technological advances in fintech, businessmen can easily make payments and financial transactions within seconds due to the speed offered by technological platforms. Not to be overlooked is the fact that transactions have been made simple through a secured and user-friendly interface.
As we head into 2020, innovative financial technologies will continue to transform the financial services landscape and play a fundamental role in making financial products more accessible to more people. The ride is sure to be bumpy, but fintech is here for the long run.
A major shift is expected in 2020 and the consumer in Africa will have access to several choices. That ability for a consumer to choose means the only way to remain competitive is to have the best product. As we usher in the new decade, we expect to see a sudden shift in technological access, as more people acquire smartphones that will connect nearly 600 million people across Africa.
Kenya is ranked with South Africa and Nigeria as countries that are home to Africa’s most valuable technological ecosystems, and typically accounting for the most startup investment received on the continent annually.
This implies that the future is definitely bright for Kenyan fintechs as has been shown by our zeal to use technology to create a raft of tech-based products and solutions from mobile money, online payment processing, lending to investing. As fintechs continue to develop, the resultant startups are plugging large gaps that exist in local financial services industries in the Kenyan financial scene.
According to The Global Fintech Index 2020, a report published by Findexable, a fintech research firm, Kenya ranked position 42 among the top 100 fintech ecosystems globally, 10 positions up from the previous ranking. In Africa, Kenya came second after South Africa, and it is listed as one of the countries to watch for its combination of local entrepreneurial success, regulatory foresight and clear signs of a flourishing local fintech ecosystem.
The report identifies Nairobi as Africa’s second-largest fintech hub, with an estimated 20 per cent of African fintechs and an emerging ecosystem of local investors complemented by a steady rise of international investors and growing interest from global technology firms.
As we move into the new year, we expect Kenyan fintechs to step up their innovation by creating solutions that will improve the way we do businesses. Areas likely to see improvement as fintech grows include customer service. We expect technology to give businesses a chance to better interact with customers, clients and users through real-time data exchange.
Potential for growth
Another area that has the potential for growth through fintechs is the financial sector. Traditional banking models, which rely heavily on profits earned from transaction fees and require customers to physically visit branches to do their banking are quickly becoming a thing of the past.
As our financial institutions incorporate technology to improve their services, customers can expect service providers to offer practical, value-adding products that cater for their needs. Through these technologies, making transfers, payments and remittances is being done remotely on mobile devices.
The next decade’s customer will be looking for the next generation of financial service providers. In a global financial landscape that is constantly changing and innovating, financial organisations will need to think more creatively in terms of relationships. This means thinking outside the box culturally, technologically and operationally.
Technology and finance have worked closely together for years. What has changed in recent years is the pace of innovation as technology has begun to transform the customer experience in financial services. Pivotal to this revolution is fintech as artificial intelligence leads to automated processes and improved penetration. Kenya still has a huge opportunity to reach more people with digital finance.
Mr Mutiso is the co-founder and CEO of Alternative Circle, a Kenyan fintech