Matching fintech companies with African financial institutions
The Dutch Development Bank FMO together with Miami-based fintech and digital transformation strategists firm above & beyond, have introduced a marketplace to help fintech companies, mobile money providers and financial institutions in Africa find clients for their solutions and broaden their horizons.
According to FMO, FinForward is a match and integration tool aimed to accelerate the digitisation of the financial industry in Africa by providing support to both financial institutions and tech entrepreneurs. The platform assists to match fintech companies from around the globe with African financial institutions. After the matchmaking, the parties enter a testing environment where the banks and fintechs can test and integrate new financial technology solutions in a safe and secure manner.
The matching and integration tool will make global fintech companies accessible to African financial institutions in order to help them to reduce costs, innovate, add services, tap into new revenue streams and work towards open banking platforms. It will also enable them to service difficult to reach segments such as the bottom of the pyramid, women and small entrepreneurs, adds FMO.
Andrew Shaw, senior fintech Specialist at FMO, explains: "We feel that the fintech conversation is less about who the disruptor is and who is the incumbent, and more about the ecosystem and new partnerships and alliances. We want to stimulate collaboration where it makes commercial sense, and where we can improve financial inclusion."
As an impact investor, FMO supports sustainable private sector growth in developing countries and emerging markets by investing in ambitious projects and entrepreneurs.
FinForward encompasses a nine-month programme which aims to link fintechs with financial institutions in Africa, matching and pairing of fintechs is based on problem definition.
The platform also consists of another programme called Fintech Opportunity Scan - where participating banks and mobile money providers define their problems and needs and demonstrate success during showcase days.
"FinForward is one of a kind initiative that facilitates collaboration between financial institutions, mobile money providers and fintech companies. We are building a thriving interconnected global ecosystem integrated through one single platform", adds Jorge Ruiz, co-founder and CEO of above & beyond tech.
Fintech, according to FMO, is a game changer for emerging markets through reaching millions of unbanked Africans, financial institutions recognise smaller fintech companies as a game changer that allows them to increase efficiency and expand their client or product base.
An EY FinTech Adoption Index 2017 study lists SA among the countries that will see significant growth in fintech adoption.
"SA's future adoption rate of fintech services is likely to increase to an average of 71% in the future, much higher than the expected global growth rate of 52%," notes EY.
Dominique Collett, a senior investment executive at Rand Merchant Investments and head of AlphaCode, says African fintech start-ups are disrupting the payments sector with their innovative solutions.
"In 2016, $5.5 billion of venture capital investment went into payments start-ups. This represented 22% of global fintech investment activity," she explains.