We’ve been enjoying various benefits of the Fintech industry. From simple mobile transactions to high-tech financial solutions, Fintech has been showing us that technology is fast becoming the basis of global industrialization.
However, the Fintech industry wasn’t built overnight. According to the infographic composed by Carsurance, it had to go through a lot of stages to become what it is today. This journey, though, would be incomplete without some major components disrupting it and advancing its growth.
In this article, we will highlight two such components and their influence on fintech.
Studies show that about 54% of international banks have partnered with Fintech companies, in Zimbabwe Ecocash is the biggest Fintech company with over 90% market share in the sector, and the banking sector itself recorded about 41% of funding from these companies in 2015 and 2016.
The banking sector has long been a major part of fintech. By flowing with the tide of technology and advancing toward digitalization, the fintech industry grew in proportion over time.
In fact, it took off in 1918 when the US Federal Reserve developed the Fedwire Funds Service, a service layered on the foundation of Morse code and telegraph.
Today, we can simply stay in our rooms with our mobile phones and perform various transactions within the blink of an eye. This is all due to the acceptance of innovations by the banking system.
This is one technology that has quickly established its presence in the Fintech world. Blockchain is a decentralized, distributed and public digital ledger that is used to record transactions across many computers so that any involved record cannot be altered retroactively, without the alteration of all subsequent blocks
It has found a wide variety of use cases in different sectors across the globe, and the banking sector is no exception. In fact, according to statistics, 69% of banks already included blockchain to at least some extent in their daily business operations. Further studies show that 77% of Fintech companies are already experimenting with blockchain.
Today, much of Africa has an opportunity to leapfrog the development mistakes of the West by reimagining entire systems of production, financial services, and governance fueled by blockchain, positioning itself as the ultimate unicorn case study.
While still in the early stages, decentralized technologies in Africa have succeeded in gaining traction, effectively tackling the continent’s most pressing economic, social, and political issues. With the emerging sectors of education, financial services, land titling, healthcare, and agriculture most ripe for innovation, Some of the African companies are spearheading the biggest impact projects in Africa using distributed ledger technology.
M-Pesa is one of the African mobile carriers that stepped in and took the role of the centralized financial node by allowing locals in Kenya to buy and sell minutes, bringing millions into the financial ecosystem. M-Pesa equivalents quickly sprung up in Uganda and Rwanda, with a population hungry for an alternative to the cash-based system.
Tatiana Koffman a blockchain blogger reported that “an African consumer is six times more likely to have a mobile digital wallet than the world average.”