Written by Mwara Gichanga
Kenya’s financial sector is on the brink of yet another sweeping revolution that will define the playing field in the next decades to come: financial technology.
Fintech, as it is increasingly being referred to, is taking the industry by storm, causing a major disruption becoming a trailblazer and redefining the financial sector in the nationally, region and globally.
In this day of fast paced technological innovations, disruption is the new norm: Uber, Pesalink and M-PESA are all good examples of what technology can do to reconfigure the way we live.
Eric and Francis both agree that the Kenyan Business Environment is certainly conducive for Fintech as Disruption as it turns out, is as much a form of social evolution as it is of technological improvements, internet penetration levels are really high compared to other African states which gives Kenya a great advantage for mobile money transfer.
Banks incorporating FinTech to their solutions
The Banking sector is actually at the fore front of integrating financial technology into their systems, with the introduction of Pesalink which is a money transfer service from a local Kenya Shillings bank account to another local Kenya Shillings bank account in real-time. It is a collaboration between all local banks who are members of the Kenya Bankers Association (KBA) and is managed by Integrated Payment Services Limited (IPSL) which is a subsidiary of KBA. PesaLink is real-time, available 24/7 and you can transfer from as low as KES 10 to as high as KES. 999,999. It is also safe since it eliminates the use of cash as a mode of payment.
With this high rate of adoption of digital financing in Kenya is considered among the highest in Africa. Kenya is now recognized as the home of mobile money, reaping the benefits that come along with it.
But with this subsequent growth, risk is invertible and questions have to be asked especially those that enable and frame policy that will foster growth in this sector.
A new law needs to be enacted yesterday to enable Africa’s first virtual bank to be born in Kenya. Not Nigeria. Not South Africa. This is the birth place of Mpesa for crying out loud! Where we account for 10% of all global mobile money transactions! Yet we have a policy and regulatory regime that is still steeped in the physical cash economy.
We need to consolidate our gains by opening up the policy and regulatory framework to make it easy and fast to move to the next phase of this Fintech Innovation.’’ AliHussein
Will block chain technology affect the market
The transformation of the financial services industry is top-of-mind for everyone in the field and blockchain might be the hottest topic in the rapidly changing world of Fintech. But how can this technology really help financial firms? This report from World Economic Forum takes a pragmatic approach to answering this question.
Concerns over bitcoin and its underlying technology
Crypto currencies such as bitcoin have started being hyped by block chain enthusiasts. However, the moment CBK will recognise it, its true effect will be seen. Francis Monyango
Similar sentiments were shared by Eric Mwangi who argued that in every conversation it is said that “Bitcoin is here and will change everything”. He continued to explain that what all those Crypto-pundits fail to remember or read about is at the beginning of the dot.com
boom there were Netscape, Yahoo, AOL, Lycos Alsta Vista etc. the outcome yielded different winners: Amazon Google, Salesforce etc.
Again, as with dot.com
there is something the larger public don’t understand. While the media mulls over Bitcoin and and gives credence to a slew of people proclaiming a “decentralised network that no one will own” to a naive public and convincing them to dump millions into “ICO”, there is something else happening. Consider FAAMG (Facebook, Apple, Amazon, Microsoft, Google) do you think it’s a coincidence they are major deployments for many Blockchain networks?
As with previous games the winners are already taking in massive rewards because they are already hooked into an existing IT and Banking Infrastructure. Currently investments are only flowing into Blockchain infrastructure that must be enterprise grade. Same as the Internet didn’t make IT departments irrelevant, Blockchain will not replace IT departments. What will change is the speed and types of skillset needed in it. There will be no immediate shift to everything Blockchain – there will be long periods of co-existing and integration with existing IT systems. However Blockchain will lead to a strong surge in cloud adoption.
The consequence of Blockchain among consumers will be most felt in Infrastructure were developments relating to Identity, Privacy and Security are taking shape.