Banks urged to embrace FinTechs to achieve financial inclusion

Banks urged to embrace FinTechs to achieve financial inclusion

According to David McLean, the president of Ethico Live, an international trade and digital investment hub, FinTech players and the incumbent banks have the potential to accelerate the digital transformation of financial services in Africa and to make financial services more efficient and accessible to under-served markets across the continent. (Image credit: HuffPost)

Financial institutions in Uganda and the entire East African region have been urged to embrace FinTechs to achieve financial inclusion.

According to David McLean, the president of Ethico Live, an international trade and digital investment hub, FinTech players and the incumbent banks have the potential to accelerate the digital transformation of financial services in Africa and to make financial services more efficient and accessible to under-served markets across the continent.

“FinTech holds a particularly powerful promise for Africa, especially as an enabler of key strategic priorities, such as financial inclusion and deepening. The impact of new disruptive financial technologies is well placed to be genuinely socially useful, meaningfully improving how ordinary people engage with financial services and therefore deliver broader-based positive economic outcomes across the continent,” Mr. Mclean says.

“FinTech also sets the bar higher for incumbent banks in terms of their own innovation agendas as the leading banks internationally and in Africa seek to make digital pay and explore collaboration opportunities with FinTech trail-blazers,” he adds.

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With technologies, including Blockchain and Cryptocurrencies, Open Banking, Payments innovation, and Mobile Money, driving the financial services paradigm shift, Mr. Mclean says the unique environment for financial services in Africa is fertile ground for innovative FinTech players who are not only disrupting but also building it from the scratch.

Mr. Chris Principe, international FinTech thought leader, says it is time for African companies to begin using technology to create opportunities for the youth.

“A very positive story, if one that is not yet well understood, is unfolding in Africa. New technology, new ideas, and new business models are producing new opportunities. The distinctions between telecom services providers, payments services providers and financial institutions are breaking down,” Mr. Principe says.

“In virtually all African countries, there are sufficient numbers of mobile phones ‐ which are not necessarily smartphones ‐ for previously unbanked people to have access to high-quality financial services at low cost. Innovative companies are using Blockchain technology and crypto‐currencies to resolve fundamental problems such as lack of access to electricity and lack of access to global financial markets,” he adds.

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