Some of the historical events have caused massive transformations of the global economy, as well as of particular industries within it. The year 2020 most certainly is one of the biggest catalysts for a digital transformation we have ever witnessed. The novel coronavirus pandemic has forced the vast majority of the world’s population to go in quarantine as almost all nations have already introduced some rather restrictive measures in an effort to slow the spread of the virus.
The coronavirus pandemic carries the scale unseen for more than a century. The virus that initially was discovered in China’s Hubei province has not spread into practically all countries on earth. The region has a population of over 58 million people, roughly the same size as Italy and a bit smaller than the United Kingdom or France. Its capital Wuhan which is populated by more than 11 million inhabitants was the first major urban area to go under strict lockdown in the world.
However, not everything is as dire as people presume. Not all industries are distraught with a desolate customer base, some sectors have even experienced major growth. This is most notable for South Africa and the surrounding countries as the local culture is fas approaching a digital mindset, especially a financially digital one.
A number of FSCA regulated brokers have reported that their numbers have started soaring ever since the country imposed strict self-isolation regulations, urging South Africans to find new means of generating an income. Having the FX industry a well-established alternative in South Africa, many local entrepreneurs didn’t even give it a second thought.
This is further confirmed through the activity of local companies. For example, this forextime.com review tells us that the main reason why SA is so FX-dense is due to the currency’s unique and predictable features, thus boosting interest. Because of the “freed up” time and resources of the local citizenry, dozens of FX companies in South Africa immediately started to paint themselves as perfect alternative incomes.
However, they are not the only digital option available in the country.
Fintech in the era of a global pandemic
World Health Organization (WHO) along with national governments has warned against the use of hard cash a number of times. This is only minor advice within the framework of social distancing measures across the globe. In this process, fintech businesses play a great role as they help people remain home while still benefiting from financial services at all times.
According to 55brokers, no commercial bank nor a financial service provider operates without a web or a mobile platform. We transfer money and access banking services without leaving the house, through our phones or computers. Just a few months ago, this was just a pleasant benefit of modern technological development. However, today, businesses and individuals simply have to adapt in order to survive both physically and financially.
With more than half of the world stuck at home and businesses closed, online transactions are practically a sole option for many to remain economically active. From delivery services to education and entertainment, everything has been moved online in just a matter of weeks. Not many realize, but this is the time for fintech to thrive in markets yet to be explored.
Africa is bracing for a technological revolution
Africa is one of the fastest and dynamically growing regions on the planet. Emerging economies such as Kenya, Nigeria, and Ethiopia are set to become rivals to world superpowers such as China and India. Yet, there is a big problem of massive rural populations in those countries, often restricting access to financial resources.
Luckily, Africa as well is posing itself as one of the most innovative continents as well. Many groups in the region soon realized that setting up physical infrastructure need to increase access to financial tools significantly would not be feasible. Building so much to cover vast areas of sub-Saharan Africa would cost enormous amounts and take years to complete. To address this issue, African innovators started a real fintech revolution on the continent.
Everything started in Kenya as a nation of over 51 million people started democratizing its financial industry as a whole. Mobile money quickly became appealing to its citizens and gained momentum in just a few years. Today, the absolute majority of Kenyans use mobile banking to perform financial transactions, pay bills, utilities, and even to fill up their phone credit. This unprecedented process has boosted the country’s emerging economy significantly as more people have access to financial instruments than ever before.
This trend was quickly repeated in other countries across Africa and as of now, 46% of mobile money accounts globally are registered in Africa. This is an incredible achievement for the region as poor as Africa. Yet, roughly 66% of the Sub-Saharan population still lacks access to financial services, thus, the challenge remains in place.
The Covid-19 pandemic is a surprising boost for fintech everywhere, but particularly in Africa. Without any large spread of the virus in African countries to date, governments on the continent fear that high numbers of infections and potential community spread might be detrimental for their healthcare systems. People are urged to use remote services as much as possible and African fintech businesses are more than happy to help.
Recently, in spite of the pandemic, South Africa’s newest financial institution “Bank Zero” was launched. Now, the difference between this entity and other banks is that Zero represents a digital platform, rather than a traditional institution. Their owners aim to grant access to financial services to even more people in South Africa and potentially even beyond.
Besides, a number of startups in African nations are already coming up with plans to assist small and medium-sized businesses with digital loans. Others are setting up fundraisers and crowdfunding platforms to act within their local communities threatened by the virus. In these troubled times, fintech as an industry is changing lives in Africa and all around the world. As social distancing remains a key measure against the spread of the virus, fintech might play even a bigger role in our daily lives than ever expected.