Why FinTech Startups Working With Financial Services Incumbents Is Key To Achieving Financial Inclusion

Having held seven events in Nairobi, Nest.vc decided to expand their #WhatsNext series of events to Johannesburg.

WhatsNext Fintech Attendees SBIncubator Nest Jayshree Naidoo (Standard Bank South Africa Incubator Head) kicks off the #WhatsNext #Fintech event powered by Nest.vc | Linda Swart

The event, a forum on finance and technology, was hosted in partnership with Standard Bank South Africa and supported by iAfrikan and African Tech Round Up.

Pre-event Selfie Pre-event selfie by organizer and co-hosts (L-R: Muthuri Kinyamu, Tefo Mohapi, Aaron Fu) | Muthuri Kinyamu

Full House of Attendees A full house of attendees at #WhatsNext #Fintech powered by Nest.vc | Muthuri Kinyamu

Aaron Fu Intruding Nest Aaron Fu (Managing Partner, Africa for Nest.vc) introducing Nest.vc to the Johannesburg tech and fintech ecosystem and explaining the Nest formula | Muthuri Kinyamu

Jayshree Naidoo Kicking off the event was Jayshree Naidoo of Standard Bank South Africa | Leon Marincowitz

Tefo Mohapi iAfrikan iAfrikan Co-founder & Executive Editor, Tefo Mohapi, with opening talk on The Fintech Opportunities presented by Spaza Shops | Vije Vijendranath

Financial Inclusion Kicking off the panel with a question on "Financial Inclusion" was Tefo Mohapi, Co-founder of iAfrikan | Linda Swart

Although several topics concerning financial services and technology were discussed by the panel , which was composed of

  • Sechaba Ngwenya (CEO and Founder of Creditable)
  • Geraldine Mitchley (Senior Director Strategic Partnerships and Emerging Payments at Visa)
  • Dare Okoudjou (Founder and CEO of MFS Africa)
  • Lungisa Matshoba (Co-founder and Director at Yoco)
  • Jayshree Naidoo (Standard Bank Incubator Head)

there seemed to be two prevailing themes which at times were intertwined, namely financial inclusion and collaboration between incumbents and fintech startups.

On the subject of financial inclusion there was a unanimous agreement by the panelists that more still needs to be done to bank the unbanked and get more people, especially low income earners, to participate in the economy.

Jayshree elaborated on various of the bank's initiatives to get more people banked and explained that it is part of their mission while Dare highlighted that to achieve financial inclusion "someone has to do the heavy lifting for other players to plug and play", which given regulation and high costs is something that can likely only be done by a large financial services provider in South Africa.

Banking blue collar workers is what Sechaba's company, Creditable, aims to do as part of their efforts towards achieving financial inclusion and while talking on the subject he also quipped that

"South Africa is the only place where we pretend that we're (majority) banked." - Sechaba Ngwenya, CEO & Founder of Creditable

Panel Discussion The panel respond to a question on financial access and inclusion | Vije Vijendranath

Still on the subject of financial inclusion, one of the attendees made a point that South Africa's banks are more concerned with offering customers credit for large ticket items such as homes and cars in order to be able to keep that customer for a long time. A point which one of the panelists concurred with by making an example of how easy it is to get consumer credit for things such as clothing but quite difficult to get credit, from banks, for business financial reasons.

As the discussions continued, Lungisa noted that it is not that fintech startups are disrupting financial services incumbents but rather that they don't even clash as there are so many new opportunities that fintech startups like his, Yoco, are working that banks have not even considered. As such he believes the key is then that startups and incumbents collaborate together, especially to achieve financial inclusion.

Dare was somewhat less diplomatic by stating that yes, collaboration must happen between fintech startups and financial services incumbents and he believes it all starts with the incumbents opening up their APIs to allow startups to work with them. Something which Geraldine touched on and highlighted that VISA has a developer programme that has made available some of the company's APIs to developers and startups.

“We want open APIs for banks". - Dare Okoudjou, Founder and CEO of MFS Africa Tweet

It was a great night of debate and engagement between various fintech industry players in Johannesburg which has surely sparked a few conversations that will be ongoing and possibly some collaborations that will ensue as a result.

To end the night off was Alpesh Patel, CEO and Founder of Mi-Fone, with an inspirational talk on the story of Mi-Fone and why Africa's youth are the future.

Alpesh Patel Mi-Fone "Aspiration within reach", Alpesh explaining the Mi-Fone brand | Leon Marincowitz

One lucky attendee, Lorato Tshenkeng, walked away as the winner of the latest Mi-Fone smartphone for sending some of the best tweets during the event.

Lorato Tshenkeng Mi-Fone winner Winner of the mi-Fone latest smartphone, Lorato Tshenkeng, with NEST's Aaron Fu and founder of Mi-Fone, Alpesh K. Patel at the #WhatsNext #Fintech event

Cover Image, Dare Oukoudjou, CEO and Co-Founder of MFS Africa, talking on the #WhatsNext #Fintech panel | Aaron Fu