Embracing financial technology (FINTECH): The time is now

I remember early attempts by companies like Clydestone, CoreNett, SoftTribe, eTranzact, IT-Consortium just to mention but a few who saw the vision and the power of technology to improve financial services in the early 2000’s. These early bird tech companies worked in diverse ways, to provide financial technology services to banks.

These attempts though were not without challenges. You could see and feel their frustration with every resistance that came from a bank. Their ideas and solutions perhaps disruptive; but those were the early days when knowledge about the transformational power of technology was scanty.

I have been encouraged to write. How many of you can relate? I have two young ladies who are bright and sharp in their respective fields.  For the past two years, all I have received from them is to start writing and sharing the vast experience I have built over the past 17 years in the financial services industry.  On this journey, I have seen the growth of financial technology companies over the years in Ghana and Africa at large.

Today, a number of these companies have evolved over the years into experienced Financial Service Providers (FSPs) whose platforms have become an integral part of Ghana’s payments ecosystem. We have lost some along the way and gained so many as we learn and perfect our learn as we go “model”; a term I use to describe the evolution of Fintechs in Ghana.

I think we should all be encouraged to write about what we know to help others who will never have the privilege to be You! I have just returned from a two-day Inter-Governmental Action Group Against Money Laundering in West Africa (GIABA) meeting and it was interesting to follow what the growth and work of Fintechs has been across the sub-region. From Ghana, Nigeria, Senegal, Cote d’Ivoire, Benin, Togo you name it, the buzz word now is Fintech!

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Fintech’s are moving millions of transactions across various platforms each day.  Fintechs have used the power of technology and social media to transform how we access and use financial services today.

So what is a Fintech? And why am I writing about them?

Fintech’s are institutions who use innovative technology to offer financial services. While this function was part of traditional financial institutions that have long used automation to improve their operations, Fintechs bring in new scope, channels and use cases.

Fintech’s are called the new disruptors in financial services as they have broken down the long barriers that plagued customers for years. In my experience working in this space, I will broadly group Fintech’s in two categories; those who provide financial services to the end users- innovative products- and those who enable financial services- they carry these products to the end  user. It is a big bucket of names with most of them ending with PAY!

Fintech deployment in Africa has been exponential. According to a report by EY, which captured an overview of market developments and investment opportunities, “the Fintech landscape has grown at an annual rate of 24% over the last 10 years”. This has not only made banks sit up but has opened a Pandora’s box and unleashed a magnitude of investment opportunities across the continent; from one Fund to another, from one Angel investor to another, there is no shortage of opportunities with the evolution of Fintechs.

Some significant progress has been made in our efforts as a country to integrate Fintechs into the financial services industry but have we fully embraced the promise of Fintechs? Are we fully aware of the implications of this growth and the impact on the provision of financial services? How about the full appreciation of the Regulatory Framework and safeguard policies?

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In my next article, I will be sharing more insights on the Fintech space, highlighting some of the gains made as a country, challenges and the potential of Fintech to drive financial Inclusion using Digital Financial Services (DFS).

Source: Clara Arthur | [email protected]

The author is a Financial Technology Professional with over 15+ years’ experience across the Financial Services and Technology Industry in Ghana. She is a former General Manager- Business Development at the Ghana Interbank Payment & Settlement Systems Limited.