A Ghanaian social innovator, Bright Simons, has revealed that digital disruption in Africa’s financial sector will only take place when there are enough fintech solutions that are designed to fundamentally reform the large scale structure of the economy.
According to a report released by Deloitte and Mastercard on the theme ‘Digital Disruption in the Financial Service Industry,’ digital disruption is inevitable as a transformation power of technology in Africa.
During the World Economic Forum in Africa 2017, it noted that the wide spread reach of digital technology across sectors in Africa has spurred the introduction of new market entrants and solutions that aim to disrupt those traditional models and accelerate financial inclusion.
It further went on to disclose that a key enabler and catalyst for digital disruption in the financial services sector has been the rapid adoption of mobile phone, which plays an important role in delivering digital services to those still unbanked at more affordable prices.
The report quoted the Financial Service Industry Leader at Deloitte Africa, Roger Vester, as saying “Going forward we expect digital disruption to gain further momentum and to lead to exciting new business models in an increasingly converging industry. A glimpse into the future shows that platform companies will emerge as key industry players creating market places for a host of financial services and blurring the lines between financial services and technology providers.”
At the just ended Ecobank Fintech Challenge 2017 held in Lome, Togo, Bright Simons believes that digital disruption will not be able to gain that momentum needed to lead or cause a disruption due to the non-availability of cutting edge fintech solutions, and even if there are, most or majority of these solutions will not scale through and so it would be left with a few solutions dotting around the continent’s fintech space.
“So there is certainly a concentration, what is more likely to happen is that a lot of solutions would not scale and we going to have small solutions dotting all around the place that is bigger problem than disruption,” he said.
The founder and also president of mPedigree Network said that most of Africa’s innovators instead of looking for ways outside the financial sector to disrupt the system, they are rather busy developing solutions just to plug-in.
“If you look at some of the ways innovation in finance has happened in a long period of time, it was how an innovative new system was created outside the finance system to disrupt finance. So you look at for instance how derivatives applications came about. They did not emerge from the very core of finance, a lot of them were systems that came out of trading contracts, commodity contracts that were necessary at the heart of retail finance or corporate finance and other system like that,” he added.
He therefore urged young and up-and-coming innovators to come out with more disruptive thinking that would help them improve upon their solutions which will then help solve the needs of a large audience.