Fintech companies have emerged as the branch of financial institutions responsible for developing new algorithms that support the initiation of new services and facilitate the existing ones. Although Africa was late in establishing standardized systems for banking and other financial services, the continent is quite fast in adopting the latest approached of Fintech. For the third year, the Africa Fintech Festival was organised in Kampala, the capital city of Uganda, on 5 and 6 November 2019. The event gathered key players in the financial technology industry from more than 26 African countries, along with government entities related to the sector.
The Africa Fintech Festival is an annual point of convergence of ideas, trends, innovations, key debates on wide-ranging issues ranging from regulations, consumer protection, disruption of savings, credit, insurance and pension value chains, to borderless operations, nontraditional partnerships, and game-changing business models. The objective is to increase awareness of the latest Fintech technologies, and also to contribute to the efforts of establishing new platforms. This year, the two-day event was organised by The Financial Technology Service Providers Association (FITSPA) and Financial Sector Deepening (FSD) of Uganda. The event is significant to build and enhance Africa’s digital economy.
The theme of this year’s festival was “The Role of Fintech in Africa’s Digital Economy” and its outcomes helped to widen the conversation about the contributions of Fintech in the region. While Fintech has transformed financial services globally, its applications have also been addressing challenges specific to the African context including the distance, relevance and high-cost structure of accessing financial services. Adequate resourcing is key to ensuring that Fintech can innovate and scale in ways that support ambitious national development targets. During the festival, the participants explored new business models and started innovative partnerships to expand the coverage of Fintech in Africa to include most sectors.
One of the important directions to benefit from Fintech is within the rapidly-growing Islamic banking sector, especially in Uganda. The incorporation of Fintech in the Islamic banking system would offer great opportunities to the financial institutions as well as to the users. It would enable Islamic finance to attract more customers, increase efficiency, reduce costs and help the sector become more competitive, without compromising profitability. This is particularly true in view of the fact that the Fintech industry has a much lower barrier to entry which allows the youth to jump into the larger financial industry and try to create their own businesses.
Events like the Africa Fintech Festival are timely in reference to the upward economic growth of several African nations. On the one hand, the workforce in many African countries is increasingly becoming more skillful as more graduates with technical background enter the labour market every year. They can drive the development and implementation of new innovative strategies. On the other hand, more investors eye the booming opportunities within different sectors in Africa. Therefore, the services offered to those investors must meet and exceed their requirements in a way that facilitates all the transactions by reducing the time, effort and cost.
The Financial Sector Deepening Uganda is a company limited by guarantee promoting greater access to financial services in Uganda. The FSD Uganda seeks to develop a more inclusive financial sector with a focus on low-income individuals (particularly women, youth and forcibly displaced people) and micro, small and medium enterprises. It facilitates product innovation, conducts research, helps to promote and improve policy, rules and regulations that shape the financial sector in Uganda. In July 2017, the FSD launched the Financial Technology Service Providers Association as an independent, nonprofit, membership-based association representing Uganda’s local and global Fintech community.