FMO (Dutch Development Bank or, to give its full name, Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden N.V.) has entered into a collaboration with Miami based fintech and digital transformation strategists ‘above & beyond (a&b)‘. Together they have launched a project called “FinForward”. This is a marketplace whereby fintech companies, financial institutions and mobile money providers in Africa are linked together. After connecting, these various bodies enter into a testing environment. Here banks and fintechs can test out their services and seek to integrate different financial technology solutions. This space allows this process to happen in a safe and secure manner.
The main objective of the new service is to push forward the digitization of the financial industry in Africa. This is managed through support given to innovation in the core business by offering digital solutions. The process of matching and integration is also designed to make global fintech companies accessible to African financial services, and also to lower costs.
Another aim is digitalization, through the use of online banking services. There is also a social goal, in aiding the African banking sector to reach segments of society that are often excluded from the system financial such as women and or small-scale entrepreneurs without much in the way of infrastructure. These are the so-termed ‘unbanked’.
Commenting on the initiative, FMO‘s Andrew Shaw, who is the organization’s Senior Fintech Specialist stated: “We feel that the Fintech conversation is less about who is the disruptor and who is the incumbent, and more about the ecosystem and new partnerships and alliances. We want to stimulate collaboration where it makes commercial sense, and where we can improve financial inclusion.”
In Africa there is a growing demand for financial services. As well as providing a service this demand provides a market opportunity for innovative fintechs. Here newer financial technology like blockchain, data analytics, artificial intelligence and new distribution systems (such as online, mobile and agent networks) can be implemented.
The first wave of services under the new scheme, provided by fintechs, are likely to include balance sheet lending, platform lending, payment solutions, software-as-a-service (SaaS), digital field applications, alternative credit scoring, predictive data analytics and transaction verification via block chain. Each of these can help integrate the African banking sector more firmly and securely into the global economy.
