VERNE BABBAGE and ASSOCIATES

Transcription

1 VERNE BABBAGE and ASSOCIATES

2 Overview Demystifying Africa Benchmark Africa to some of the world leading economies The evolution and growth of technology within Africa Provide a view of some of the regulatory requirements and risks Highlight opportunities that exists Closing 2

3 The Perception The Reality: Africa has been the second fastest growing region in the world over the past decade 40% of Africans have some secondary or tertiary education By 2035, Africa will be poised to have the largest labour force in the world Africa, thought be one of the darkest places on the planet Africa contains 60% of the worlds cropland 3and has the ability to improve agriculture for the world as well as reduce unemployment

4 Africa Is Growing at a Rapid rate USA 14 GDP Growth = 2.5% Nigeria 14 GDP Growth = 6.3% India 14 GDP Growth = 5.0% Kenya 14 GDP Growth = 5.4% China 14 GDP Growth = 7.3% South Africa and Neighboring country Average 14 GDP Growth = 5.4% 4 Source: GDP rates:

5 7 Of The Worlds Fastest Growing Economies Are In Africa 5 Source: Oxford Economics & The Economist

6 Growth Sectors Africa's Growth is widespread across sectors CAGR (5 Years), % Resources 7.1% Wholesale and Retail 6.8% Agriculture 5.5% Transport and Telecommunications 7.8% Manufacturing 4.6% Other Services 6.9% Public Admin 3.9% Financial 8.0% Real Estate, Business Services 5.9% Construction 7.5% Utilities 7.3% Tourism Proportion of GDP 8.7% 6 The financial industry is the second fastest growing sector in Africa, and as such the opportunity needs to be capitalised on Source: Amethis Finance

7 The Potential Exists 1.2 billion potential 0.1 billion potential 0.9 billion potential 0.3 billion potential 1.0 billion potential Africa has the second highest population to capitalise on. Since Africa is has the highest density of 0-25 year old population, it makes technology adoption even easier 7 Source: CGAP and World Bank Group

8 Internet Growth The worlds internet population has grown over 5 years by 97% But internet users in Africa have grown TWICE as fast as the world and is growing faster then any other country in the world 8 Source:

9 What Customers Want 9 Source: KPMG

10 What Customers Want Branchless digital banking Relationship driven banking rather than transactional Proactive recommendation of banking products and services Real-time forward looking spending analysis 10 Source: Accenture 2014

11 Current Initiatives 1 3 Originating accounts and capturing customer documentation using a mobile phone frictionless payments through omni-channel presence 2 4 Agency or Community Banking eliminating the need for big branches Digitalising payments through the 11 use of a mobile phone eliminating the risks associated with cash whilst enabling customer convenience

12 Banks Need To Advance On becoming truly omnichannel by seamlessly integrating customer experience across inbranch, assisted and digital interactions extend their ecosystem by offering a greater range of services offer digital personalised financial advice & counseling to customers to manage their financial needs 12

13 Africa Is Innovating Nigeria has just went on to launch the first in Africa ID card system, that removes the need for bulky paper based ID documents. Customers can also use this card ID to make payments Source: The Botswana government is pushing the economy to make municipality payments electronically via government portals opposed to waiting in queues and paying in cash 13

14 35 Innovation Hubs in Africa 14

15 Some Examples 1 2 mobile devices are used to originate and capture the customer documentation (i.e. application form and KYC documents) mpesaoffers Agency banking where customers can send cash 15 to mobile wallets

16 Regulations Play An Important Role Tax Laws Each country has governing tax laws like withholding tax Payment Processing Many incountry payment switches regulate that payments must be processed and settled locally - costly Liquidity Requirement & Fees Onerous capital requirements, Customer Fees are restricted cash withdrawal Digital Goverment Portals Governing the electronic purchase of utilities such as electricity EMV & Transit Certain countries are regulating the rollout of CHIP cards as well as interoperable transit payment mechanisms 16 The opportunity exists within Africa but true success means fully understanding regulatory requirements to enable delivery

17 Some Business Requirements End-to-End Mobile Banking Platforms Security and Fraud Management technologies Managed services hardware distribution and value chain management businesses do not have the technical skills and infrastructure to support Facilitating interoperability of multiple third party products; e.g., wallets and retail platforms Monitoring tools; technology, business and consumer experience Consumer tools; e.g., budgeting, spend analysis, predictive Customer Intelligence Tools and Advanced Customer 17 Experience through data driven strategies

18 The African Landscape Considerations Unique business cultures in each country On the ground support structures are required Strategic local partners are a neccesity The Opportunity 53 Countries Over 1000 Banks Mobile driven aspirational society Low base, Significant market growth opportunity The will to embrace financial inclusion 18

19 Africa: The Opportunity 19 Copyright January 2015 Verne Babbage & Associates

20 THANK YOU!