The Sunday News
Nkosilathi Sibanda, Business Correspondent
FINANCIAL technology start-ups have been called upon to partner with established financial institutions for a quick solution for the local insurance, banking and finance sectors that struggled to do away with physical customer interaction in the wake of Covid-19.
Fintech platforms have improved financial access for communities that had no access to banks. This was a key highlight of the Zimbabwe National Financial Inclusion Strategy presented by the Finance and Economic Development Minister, Professor Mthuli Ncube in Harare recently.
In an interview, Mr Patrick Maseko, a business and leadership coach who has overseen the build-up of Fintech start-ups, said the emerging digital innovators have no other choice but to commit to partner with existing institutions.
“By their nature, Fintech start-ups may need to partner with financial institutions in order to deliver their products and such collaboration is important. The number of Fintech start-ups in the country is yet to catch up. There is a need for the development of an ecosystem that supports their growth,” said Mr Maseko.
He said Fintech start-ups are the key to helping reduce the spread of Covid-19.
“Travel embargos, social distancing and lockdown restrictions have changed the way business is conducted and Fintech solutions have become more essential to facilitate transactions. Banking is necessary but the brick and mortar buildings can be replaced by online platforms and mobile solutions. Insurance is important but meeting the broker can be replaced by a chatbot. Robo-advisors are also replacing human advisors when it comes to investments,” he said.
Mr Maseko said the public had to trust in Fintech capabilities in transforming the economic and financial landscape.
“There are also customers that want to physically interact with cash and experience face-to-face conversations with tellers. However, the only way to survive the change is to embrace it and to be a part of it. Anything shy of that will not see the institutions into the future. As such some financial institutions have partnered with Fintech start-ups to deliver a better value proposition to their modern customers. In Zimbabwe, the adoption of Fintech has been accelerated by a deliberate effort of the Government to intensify its push for the use of non-cash forms of payment, a move that the banks have actively embraced,” he said.
However, Mr Maseko said there have been hindrances putting to dent efforts of improving financial services on the digital scene.
“The only setback to this wave of change has been the massive investment that financial institutions have made in infrastructure and legacy systems that are difficult to upgrade.”
Implementation of Fintech services moved upward from 16 percent in 2015 to 64 percent in 2019, according data from a 2019 EY Fintech report, which also said the growth was driven, in part, by the ever-changing profile and needs of customers.
Global Fintech investments reached USD$112 billion in 2018. The modern customer now expects the financial experience to be mobile, customisable, personalised and accessible. The Reserve Bank of Zimbabwe (RBZ) in 2018 warmed up to local and foreign companies willing to offer Financial Technology (Fintech) services and products in the country.
