The COVID-19 pandemic has seen remarkable growth in the fintech industry following the ever-growing demand for quick and reliable digital solutions.
With Fintechs taking centre stage in the realm of financial services, there is no doubt that the future of the financial industry will heavily rely on fintech integration.
Fintech, otherwise known as financial technology, is an umbrella term for applying innovative technological concepts to products and services in the financial industry. The largest FinTech sectors in Uganda include; banking infrastructure, investment and savings, lending, and markets. Mobile penetration in Uganda is at 49 per cent. This reality has promoted financial inclusion for many Ugandans.
As the global economy recovers from COVID-19, fintech is playing a pivotal role in areas such as financial inclusion and opening the door to an increase in digital payments.
According to Deloitte, FinTechs in strategic partnerships with financial institutions, retailers, and government sectors across jurisdictions can help democratize financial services by providing essential financial services in a fair and transparent way to economically vulnerable populations.
Quite a number of individuals worldwide lack access to a banking system. It goes without saying that FinTechs will be central to efforts to integrate these people into the global banking system.
With that being said, a greater part of the global economic and financial system is moving online, given the rising reliance on technology.
However, the burgeoning of rampant cyber-attacks lurks in the shadows and poses a significant threat to data protection, which calls for Fintechs to be security conscious while designing their products and services. Investment in data centres continues to grow across Africa, with Raxio Group currently on pan-African expansion by investing in Uganda, Tanzania, Mozambique, Ethiopia, DRC, and Ivory Coast.
Features such as cyber security, fraud detection, data automation, cloud-based services, and other associated technologies should be integrated as a sustainability approach which subsequently poses the question; As a service provider, how can you infiltrate the Fintech space to sell your product successfully?
The first step would be to become a member of a Fintech association. By becoming a member, you are acquainting yourself with the different needs and gaps within the fintech space.
It could be anything from data centre needs such as collocation and cloud-based services to security needs such as cyber security services.
An example of a FINTECH association in Uganda is the Financial Technologies Service Providers Association (FITSPA), an independent, non-profit membership-based organization with up to 160 members representing Uganda’s local fintech community and global fintech institutions operating in the country.
Take all the necessary time to carefully understand how best you can plugin on these demands. In so doing, you have the upper hand in designing products and services that speak directly to these pain points which automatically places you above your competition.
Another important step is interacting with other players in the industry, such as fintech regulators. In order to support technology-enabled innovation in the financial services space, the Bank of Uganda (BOU) deemed it pertinent to ensure new, more flexible ways of engaging with the financial services industry. One of the options is the use of a Regulatory Sandbox Framework established pursuant to Section 16 of the National Payment Systems Act, 2020.
This places you well ahead of your game as they will guide you on the necessary steps to undertake to operate and offer your services in a fully regulated environment. With large volumes of critical data in circulation, regulation is definitely a necessity.
Fintech is not only revolutionizing financial services but also attracting major investment. It won’t be long before there is full integration.
As a service provider, maximizing your sales means strategically positioning your products and services to keep you above the radar.
The opportunities are endless and the sky is the limit!