"Information and communication technologies (ICT) have been the foundation of financial services for decades. Financial inclusion is fundamentally important for all people in Africa."
These were the sentiments of former South African Finance Minister, Mr Trevor Manuel, who was delivering a keynote address at the Colloquium titled Digital Finance in Africa's Future: Innovations and Implications, at the University of Johannesburg (UJ) on Monday, 22 October 2018.
Organised by the Johannesburg Institute for Advanced Study (JIAS) and Human Economy Programme at the University of Pretoria, in association with Disrupting Africa, the colloquium brought together African innovators in the field of digital finance as well as academics to discuss the latest developments in this rapidly growing and enormously important field.
According to Mr Manuel, the digitisation of information has proliferated in all areas of human activity, creating new vast pools of data.
"This has created opportunities and challenges for both incumbent institutions and new market entrants. Great benefits are attainable, but new risks may also emerge," he said, adding that new technology will enable competition, and that this innovation can lead to better and cheaper financial services. "However, it is not clear that welfare benefits can be maximised without policy interventions. Financial regulation and supervision can be a catalyst, but are also needed for safeguarding the financial system against risks."
The aim of the colloquium was to highlight the extent and sophistication of innovation in Africa in the field of digital finance.
Fellow speaker Stephen Nduati, former Head of National Payments Systems, Central Bank of Kenya, agreed with Mr Manuel, saying that innovation is driven by the need to be more competitive. "Traditional banking systems – including Central Banks – may face the same fate as Kodak if they fail to find new service models, he added."
''How do we regulate money transfer? Who is best positioned to drive money transfer because we are used to regulations that have been plagiarised?" asked Mr Nduati.
UJ's Prof Saurabh Sinha, Deputy Vice-Chancellor: Research and Internationalisation added that digital finance holds an enormous opportunity for greater financial inclusion and expansion of basic services beyond financial services to other sectors, including agriculture, transportation, water, health, education, and clean energy.
Prof Sinha raised questions about the possibility of a single currency for Africa and whether there should be data expropriation without compensation.
Also speaking at the event was Mr Nnamdi Oranye, Founder: Disrupting Africa/ FinTech Author who spoke about the future of Africa in the innovation space. "We need to explore the changing nature of banking, money, and financial intermediation, aiming to delve deep into these topics."
The Johannesburg Institute for Advanced Study (JIAS) is a joint initiative of the University of Johannesburg (UJ), South Africa, and Nanyang Technological University (NTU), Singapore. Its purpose is to promote advanced research in the humanities and natural sciences, beyond the regular teaching and research activities at institutions of higher learning. JIAS is the first fully-fledged institute of advanced learning in Gauteng, South Africa's political and economic heartland.