verne babbage andassociates - enterprise ireland...india ‘14 gdp growth = 5.0% kenya‘14 gdp...

VERNEBABBAGEand ASSOCIATES

Overview

� Demystifying Africa

� Benchmark Africa to some of the world leading economies

� The evolution and growth of technology within Africa

� Provide a view of some of the regulatory requirements and risks

� Highlight opportunities that exists

� Closing

Copyright February 2015 Verne Babbage & Associates

2

The Perception


3“Africa, thought be one of

the darkest places on the

planet…”

The Reality:

• Africa has been the second

fastest growing region in

the world over the past

decade

• 40% of Africans have some

secondary or tertiary

education

• By 2035, Africa will be

poised to have the largest

labour force in the world

• Africa contains 60% of the

worlds cropland and has

the ability to improve

agriculture for the world as

well as reduce

unemployment

Africa Is Growing at a Rapid rate


4

China ‘14 GDP

Growth = 7.3%

South Africa and

Neighboring

country Average

‘14 GDP Growth

= 5.4%

India ‘14 GDP

Growth = 5.0%

Kenya‘14 GDP

Growth = 5.4%

USA‘14 GDP

Growth = 2.5%

Nigeria ‘14 GDP

Growth = 6.3%

Source: GDP rates: www.eiu.com

7 Of The Worlds Fastest Growing Economies Are In Africa


5Source: Oxford Economics & The Economist

Growth Sectors


6 - 5 10 15 20 25 30

Tourism

Utilities

Construction

Real Estate, Business Services

Financial

Public Admin

Other Services

Manufacturing

Transport and Telecommunications

Agriculture

Wholesale and Retail

Resources

Proportion of GDP

Africa's Growth is widespread across sectors

“The financial industry is the second fastest growing sector in Africa, and as such the opportunity needs to

be capitalised on…”

7.1%7.1%

6.8%6.8%

5.5%5.5%

7.8%7.8%

4.6%4.6%

6.9%6.9%

3.9%3.9%

8.0%8.0%

5.9%5.9%

7.5%7.5%

7.3%7.3%

8.7%8.7%

CAGR (5 Years), %

Source: Amethis Finance

The Potential Exists


7“Africa has the second highest population to capitalise on. Since Africa is has the highest density

of 0-25 year old population, it makes technology adoption even easier…”

Source: CGAP and World Bank Group

1.0 billion potential

0.9 billion

potential




Internet Growth


8Source: www.pingdom.com

• The worlds internet

population has

grown over 5 years

by 97%

• But…internet users

in Africa have

grown TWICE as

fast as the world

and is growing

faster then any

other country in

the world

What Customers Want


9Source: KPMG

What Customers Want


10Source: Accenture 2014

Branchless digital banking

Relationship driven banking rather than

transactional

Proactive recommendation of banking products and services

Real-time forward looking spending analysis

Current Initiatives


11

1

“Originating accounts and

capturing customer documentation

using a mobile phone…”

2

“Agency or Community Banking

eliminating the need for big

branches

3

“frictionless payments through

omni-channel presence

4

“Digitalising payments through the

use of a mobile phone –

eliminating the risks associated

with cash whilst enabling customer

convenience…”

Banks Need To Advance On…


12

1

“becoming truly omni-

channel by seamlessly

integrating customer

experience across in-

branch, assisted and

digital interactions”

2 3

“extend their ecosystem

by offering a greater

range of services…”

“offer digital

personalised financial

advice & counseling to

customers to manage

their financial needs…”

Africa Is Innovating…


13

“Nigeria has just went on to

launch the first in Africa ID

card system, that removes the

need for bulky paper based ID

documents. Customers can

also use this card ID to make

payments…”

“The Botswana government is

pushing the economy to make

municipality payments

electronically via government

portals opposed to waiting in

queues and paying in cash…”

Source: www.forbes.com

35 Innovation Hubs in Africa


14Source: @mHealth_Africa

Some Examples


15

1

“

“mobile devices are used to

originate and capture the customer

documentation (i.e. application

form and KYC documents)…”

2

“mPESA offers Agency

banking where

customers can send cash

to mobile wallets…”

Regulations Play An Important Role


16

Tax Laws

Each country

has governing

tax laws like

withholding

tax

Payment

Processing

Many in-

country

payment

switches

regulate that

payments

must be

processed and

settled locally -

costly

Liquidity

Requirement

& Fees

Onerous

capital

requirements,

Customer Fees

are restricted

– cash

withdrawal

Digital

Goverment

Portals

Governing the

electronic

purchase of

utilities such

as electricity

EMV & Transit

Certain

countries are

regulating the

rollout of CHIP

cards as well as

interoperable

transit payment

mechanisms

“The opportunity exists within Africa but true success means fully understanding regulatory

requirements to enable delivery”

Some Business Requirements

� End-to-End Mobile Banking Platforms

� Security and Fraud Management technologies

� Managed services – hardware distribution and value chain

management – businesses do not have the technical skills and

infrastructure to support

� Facilitating interoperability of multiple third party products; e.g.,

wallets and retail platforms

� Monitoring tools; technology, business and consumer experience

� Consumer tools; e.g., budgeting, spend analysis, predictive

� Customer Intelligence Tools and Advanced Customer

Experience through data driven strategies


17

The African Landscape

� Considerations

� Unique business cultures in each country

� On the ground support structures are required

� Strategic local partners are a neccesity

� The Opportunity

� 53 Countries

� Over 1000 Banks

� Mobile driven aspirational society

� Low base, Significant market growth opportunity

� The will to embrace financial inclusion


18

THANK YOU!

verne babbage andassociates - enterprise ireland...india ‘14 gdp growth = 5.0% kenya‘14 gdp...

Documents