Africa has been “late to the fintech party,” according to a report by African news service Quartz. However, peer-to-peer payment processors like M-Pesa and digital currencies such as Bitcoin are providing greater accessibility to banking services on the continent — a trend that legacy banks such as Barclays are starting to not only acknowledge, but also take part in.
Blockchain could be the most significant social and political innovation to impact Africa in 100 years
— Arian Lewis, Head of Open Innovation at Barclays
Barclays: ‘Are We Actually a Tech Company?’
Quartz Africa, a news website with an African team based in Kenya, Nigeria, and South Africa, released a new report on February 19th revealing a stark contrast to the Motherboard Vice article back in January that says Bitcoin in Africa is a “myth.”
The report first details the opinion of Vinny Lingham, a South African entrepreneur and creator of the blockchain startup Civic, who believes traditional finance institutions should be worried.
“I think the banking sector in Africa is going to be disrupted faster than anywhere else in the world,” said Lingham. “What you have with bitcoin and blockchain is a trustless method of operating. You don’t need third parties like banks operating as trust brokers anymore. It’s all built into the code. The way mobile leapfrogged fixed lines communications in Africa; blockchain will leapfrog a lot of the financial infrastructure that exists today.”
In fact, there’s quite a bit of action happening on the continent when it comes to financial technology including a few programs involving legacy institutions. One such bank that’s looking to get ahead within the African financial tech landscape is Barclays.
“People in Africa do banking on their mobile phones, but our talent base is all built on bricks and mortar banking,” Head of Open Innovation at Barclays, Arian Lewis, said, continuing:
So we’re thinking, are we actually a tech company? To make that shift, you have to approach talent that sits at the front end of that change curve.
To this end, Barclays is helping a blockchain startup based in Cape Town called Consent. The concept of the platform uses digital ledger protocol to record medical records that are often mismanaged or lost in the region. The startup had won funding from Barclays and a contract to develop its proof-of-concept. Consent co-founder Shaun Conway believes the finance company is steering towards becoming a tech company.
“Barclays is trying to define what they become in the future, Conway tells Quartz. “It’s like they’re going through a midlife crisis.”
Blockchain Startups in Africa
The continent has many people believing in the potential of fintech in Aftica as startups have been popping up left and right.
The idea of making remittances cheaper than ever before and the evolution of the global market structure has created quite a bit of enthusiasm for financial technology investors in Africa. Payment processor startups like BitPesa have entered the region to give better solutions to African citizens sending and receiving money abroad.
Meanwhile, other startups such as Naira Exchange are also joining the ranks with local bitcoin startups by offering “fast Bitcoin and other e-currencies account funding in Nigeria and Naira payment into all banks and their payment into all banks and their branches in Nigeria.”
Bitcoin platform startup BitX is another business making moves in Africa. Founded by Marcus Swanepoel, and Timothy Stranex, the business has raised close to $9 million USD in funding from investors like the African-based Naspers Group, Barry Silbert’s Digital Currency Group and more. Additionally, a blockchain conference has been announced for February 25th alongside the creation of the Bitcoin Academy in Cape Town.
The emergence of open platforms, digital ecosystems, and interest from legacy banks are demonstrating the huge potential for fintech and Bitcoin growth on the continent. With the developing region eager to receiving banking services and increasing mobile connectivity, businesses and banking firms in the region have a reason to be optimistic when it comes to these emerging technologies.
What do you think about fintech and Bitcoin gaining steam in Africa? Let us know in the comments below.
Images courtesy of Pixbay, and Wiki Commons