Financial inclusion is a critical issue for Africa and many other emerging markets. In this blog post, Traderoot Africa CEO, Louis Volschenk takes a look at how building a more inclusive financial system has become a major priority.
Despite Africa’s rapid economic growth in recent years, a significant portion of the population still lacks access to basic financial services; such as bank accounts, credit, and insurance. “This lack of access to financial services can make it difficult for individuals and businesses to manage their money, plan for the future, and invest in their communities,” says Volschenk.
How is Fintech Driving Financial Inclusion?
However, there is a growing sense of optimism that fintech can play a major role in driving financial inclusion in Africa. Fintech, or financial technology, refers to the use of technology to improve and innovate financial services. In Africa, fintech companies are using a variety of cutting-edge technologies and approaches to make financial services more accessible to underserved populations.
One of the most promising areas of fintech in Africa is the use of biometrics such as facial recognition and fingerprint scanning to verify identity and increase access to financial services. According to the World Bank, around 1.7 billion people globally lack any form of identification, and this number is particularly high in Africa. Biometric technologies like facial recognition and fingerprint scanning can help to overcome this problem by providing a secure and reliable way to verify identity.
For example, in South Africa, a fintech company is using facial recognition technology to enable customers to open bank accounts and access other financial services via their mobile phones. “This is reducing the barriers to accessing financial services for many people, particularly those in rural areas who might not have traditional forms of identification”, says Volschenk. According to a study by the Bill and Melinda Gates Foundation, this technology has the potential to reach more than 50 million people in Sub-Saharan Africa.
AI and Automation’s Role in Financial Inclusion
Another innovative approach is the use of virtual agents and chatbots to provide financial services through messaging platforms. This approach is being used in countries such as Ghana, to help people access financial services through their mobile phones, even if they don’t have a bank account or internet access. According to a study by the GSMA, these chatbots can help to increase financial inclusion by providing services such as account opening, balance checking, and bill payments.
Additionally, fintech companies are also using Artificial Intelligence to provide affordable financial advice to individuals and small businesses, in order to help them make better decisions about their money. This is particularly important in countries like Egypt, where many people don’t have access to professional financial advice. According to a study by the African Development Bank, AI-driven financial advice can help to increase access to financial services, and improve the lives of people across Africa.
The rise of financial inclusion in Africa is a testament to the power of fintech to drive economic growth and improve people’s lives. With the use of biometrics, virtual agents, chatbots and AI fintech companies are making financial services more accessible and convenient for people across the continent, particularly for those living in rural and remote areas. We believe that the continued use of these technologies will only further accelerate this trend.
Traderoot is leading the way in enabling financial inclusion across Africa and other emerging markets. Our range of Fintech modules and products are being used by banks, payment service providers, mobile network operators, central banks, automated clearing houses, card issuers, credit providers, insurers, retailers, and start-ups across the continent to build a more democratised and accessible economy. Learn more about our products under the solutions section of our website or by emailing firstname.lastname@example.org and start perfecting commerce.