CIO OPINION
experiences : reading this , you probably had a parent and grandparent , who has had bank accounts . When you left school and entered the workplace , storing and managing your money digitally was natural , it ’ s the way it always was .
Now imagine someone who has had no one in their family and support network store their wealth digitally , never mind partake in elaborate financial management . How can we expect someone who has never encountered what you and I take for granted to have the same generational trust in a digital store of value and be able to make the transition in one leap ?
Bridging the cash and digital divide and bridging the formal and informal sectors is a big strength of FinTech , but financial education is paramount for this to occur .
Just because South Africa has a mature and well-established banking sector , it is an error of judgment to assume that everyone , including migrant workers , will have a well-established and mature financial services mindset . Many don ’ t , and they need education , starting with basics such as the importance of keeping PINs safe , through to the value of treating digital solutions as more than conduits for cash .
Many of South Africa ’ s entry-level bank accounts are conduit mechanisms for cash to arrive ( in the form of payments ), and so the onus is on the financial sector to educate users that they need not withdraw all their funds at once and that it is safe to store their money digitally . Expect to see significant efforts across the sector to educate , influence and entice customers to make this shift in behaviour .
The future of FinTech in SA
FinTech is pioneering by its very nature and FinTech companies will continue finding new and innovative ways to deliver services to customers where and when they need them .
Increasingly niche FinTech players can provide a service in their areas of specialisation more dexterously and efficiently than a larger , legacy institution . This usually comes with better a customer experience too , and almost certainly at a more attractive cost base than what they could achieve . The outcome is that we will likely see more and more banks decide that instead of competing with agile FinTech players , they will be asking how they can leverage their expertise . Rather than reengineering solutions that already exist , the keyword will be partnerships .
Ultimately , the customer , the person on the street , will be the beneficiary as the entire financial industry will be in a better position to share experiences and learn from each other , not least in how FinTechs are managing to serve the unbanked and underserved segments .
There ’ s no turning back the clock and both the regulators and industry players know this . It is important that the FinTech industry sees the inherent value in engaging constructively with the regulators . Compliance is a business enabler , not a disabler . It ’ s by working together that we can unleash the true power of innovation and technology to solve important challenges and serve more people . And you don ’ t always need an app for that . p
40 INTELLIGENTCIO AFRICA www . intelligentcio . com