By 2050, African will be home to a quarter of the world’s population. It currently has the youngest and fastest growing workforce: 60 percent of the population is under 25.

How can we harness this potential and deliver long-term opportunities of the “highest quality and breadth,” as the PM promised in the Cape Town speech?

UK businesses, particularly fintech firms, are in the best position to achieve this ambition, especially those with the capability to leverage Africa’s mobile connectivity.

There are over 700 million mobile subscribers in Africa and that number is expected to top 1 billion by 2023,

Mobile wallets creates many business opportunities for fintechs and a way to reach the unbanked—which, according to the World Bank, accounts for 68% of Africa’s adult population.

Some nations have embraced mobile wallet innovation faster than others. Kenya, for example, is leading the way with over 90% of the country using this payment method via M-Pesa, arguably the most successful and impactful fintech innovation in the world.

In contrast, Nigeria lags behind adoption, despite having the largest mobile market in Africa. There are now 135 million wireless connections yet only 6% of Nigerians use their mobile phones to make financial transactions.

Bringing digital money transfer into the mainstream by tapping into Nigeria and other “mobile-first” and nearly “mobile-only” markets in the regions—such as South Africa, Uganda and Angola, can help to close the poverty gap and drive financial inclusion—a problem that traditional banks have yet to solve.

The barriers to financial inclusion through traditional banking are variable and complex. Among them is the inability of Africa’s central banks to keep up with financial innovations that can reach the most vulnerable people. Regulatory reform is also required—and should extend to the telecommunications sector, which has become a vital financial services provider to millions of people.

Wide distrust in the banking system and fears of financial fraud are also major factors, as well as the extortionate charges that customers must pay for everyday banking services.  In big African economies like South Africa, financial services fees can be up to four times higher than in rich nations such as Germany or Australia – making it impossible for the poorest in the country to join the formal economy. As a result, more than 60% of all purchases in South Africa are still paid for in cash.

Banks struggle to lower their fees due to the high operating costs associated with doing business in fragmented markets and the ongoing need to spend on IT security to minimise the threat of cybercrime.

The only tangible solution to the unbanked crisis is through mobile innovation, which offer the  affordable services that banks fail to deliver.

M-Pesa allows anyone with a smartphone to deposit, withdraw or transfer money and to pay for goods and services at a fraction of what the banks would charge.

Azimo has a strong partnership with M-Pesa, with 96% of our transfers to Kenya arriving in M-Pesa mobile wallets.

Remittances sent home from abroad in this way are helping million of people to feed families, educate children, and pay for medical care. In Nigeria, remittances totalled $22bn in 2017—more than the country’s oil revenues.

Receiving a money transfer is often the first regular financial transaction that many people in sub-Saharan Africa will make.

Once people are part of a financial system, they can gain access to other life saving services, such as: borrowing to invest in housing or to start a business, insurance against crop failure, and saving for education or old age.

The UK has the biggest and most innovative fintech sector in the world, and leads in the area of mobile payments. Africa needs this innovation and expertise —and the UK fintech needs Africa to scale and grow.

As the continent continues to embrace technology and improve their digital infrastructure, there will be significant opportunities for the UK fintech firms to compete in the region with banks and local fintech competitors.

This will lead to greater choice and better services for customers—at prices that are inclusive and fair.  And with more people gaining access to financial services, there will be greater levels of prosperity in Africa, which will enable the continent to compete effectively on a global scale.

By Michael Kent, CEO, Azimo 

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The solution, known as Sage Salary and Supplier Payments, will allow businesses and their accountants to securely manage and process payments from directly within the Sage Accounts and Payroll products.

A key part of the success of small businesses is their ability to access high-quality and responsive banking services. Initiatives such as Open Banking and the RBS Alternative Remedies Package are creating new opportunities for digital alternatives to increase the competitiveness of these services.

The Modulr and Sage partnership aims to improve the payments offerings available to small and medium-sized enterprises (SMEs) and accountants; helping to bring much needed innovation and competition to the UK SME banking and payments market.

Sage Salary and Supplier Payments, powered by Modulr, will allow business owners, payroll managers, accounts payable administrators, payroll bureau and accountants to securely process payments directly from Sage Business Cloud Accounting and Sage Payroll products. The seamless and automated payment service will be delivered to Sage customers across the UK using Modulr’s award-winning payment accounts that provide access to payment services 24/7, 365 days of the year.

The solution will allow customers to eliminate manual payment processes, preventing costly errors and risk of sensitive payment data being compromised whilst benefiting from the time saved by automated reconciliation of payment data. Importantly, Sage’s Accountant and Payroll Bureau Partners will be able to benefit from delegated service access—allowing the accounting practice to seamlessly control and manage payments processing on behalf of their whole client base, while simultaneously reducing practice overheads.

Seamus Smith, Executive Vice President Global Payments & Banking at Sage, said: “Being able to pay employees and suppliers on time is an essential part of modern business. By enabling our SME customers and accountant partners to automate vital financial processes directly from our products, we can exceed their expectations. This will help them to save time on administrative processes, take control of the flow of money through the software, improve data security and reduce costs.

“Modulr brings significant industry expertise that offers us the opportunity to expand the capabilities of our solution with new functionality and geographies, together with specific support for the development of our partner channels.

“Customers and accountants will further benefit from real-time visibility of payments, seamless reconciliation of payment data into Sage’s Accounting and Payroll products and role-based access controls, meaning that they can track and manage a full audit trail of activity pertaining to outgoing payments, which will give them full control of a crucial part of their business.”

Myles Stephenson, Chief Executive of Modulr, added: “Our Payments as a Service API platform enables our partners to quickly and easily integrate new payment services into their core products.  Our innovative partnership with Sage will enable SMEs to address the significant burden created by existing inefficient payment processes. Our fully integrated service provides a fast, easy and reliable alternative to processing payments via traditional business and corporate banking.”

The new Sage Salary and Supplier Payments, powered by Modulr, is now available to existing Sage Payments customers and new & existing Sage customers.

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According to a survey of 1,002 UK workers in full or part-time employment, carried out by Probrand.co.uk, the majority (58%) of businesses in the utilities industry failed to wipe the data from IT equipment they disposed of in the two months following GDPR.

This news is perhaps less surprising given the research also found that 92% of all UK companies in the utilities sector do not have an official process or protocol for disposing of obsolete IT equipment.

What’s more, 92% of workers in the utilities industry admit they wouldn’t even know who to approach within their company in order to correctly dispose of old or unusable equipment.

Worryingly, according to the data, businesses in the utilities sector—many of which will have customer addresses and contact information on their systems—are one of the industries most guilty of this.

The only industries with an even worse record of not clearing the memory of IT equipment before disposal in the months following GDPR were transportation (72%), sales and marketing (62%) and manufacturing (59%).Matt Royle, marketing director at Probrand.co.uk, said: “Given the amount of publicity around GDPR it is arguably impossible to be unaware or misunderstand the basics of what is required for compliance. So, it is startling to discover just how many businesses are failing to both implement and follow some of the simplest data protection practices.”

“This is especially startling to see from businesses within the utilities sector, where sensitive customer information including address details and card numbers are handled all the time.”

“The fines involved in a GDPR breach can potentially run into the millions—and what appear to be less tangible impactors, like reputational damage, customer trust and loyalty, will ultimately become financially significant.”

“Given these findings, it is clear that more needs to be done to ensure that all businesses have a disposal procedure in place to avoid inadvertently leaking sensitive.data.”

The top 10 industries which are most guilty of not clearing the memory of IT equipment before it is disposed of:

1.  Transportation – 72%
2.  Sales and marketing – 62%
3.  Manufacturing – 59%
4.  Utilities – 58%
5.  Retail – 57%
6.  Education – 54%
7.  Leisure and travel – 49%
8.  Healthcare and hospitality – 45%
9.  Trades / administration – 44%
10. Information and communication – 39%

Probrand is the UK’s first marketplace for business IT, providing IT Products, managed IT services and IT solutions.

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