The new episode of FInsight: The Global Financial Institutions Industry Podcast turns its attention to Africa – how the continent is currently dealing with the pandemic, and how financial institutions are doing in the region.
In this episode, Wildu du Plessis, a partner at our Johannesburg office and Head of Africa, talks about key observations around financial institutions in the continent, with a focus on South Africa, Kenya, Nigeria, and Ethiopia.
On a high level, there remains a lot of uncertainty around the region – the means and spread of any economic recovery, and what structural changes it will bring in the longer term.
- Africa has seen several regulatory changes in the last two years, but not all of them are focused on the pandemic. There has been an increase in new regulations, as African financial institutions (FI) become more mainstream.
- Several African central banks have announced formal policies to encourage cashless payment transactions and they have introduced other forms of fintech support policies. A significant portion of the population in the continent remains largely unbanked, which has led to the increased use of ‘e-money.’
- The opening of new markets and the easing of cross-border transactions envisaged under the African Continental Free Trade Agreement (AfCFTA) is expected to increase capital funds and promote both foreign direct investment and intercontinental investment in Africa, and financial institutions will need to lead the way to make sure that that continues to happen.
- Regulators are starting to figure out how to approach cryptocurrencies and the use of blockchain technology. Reception to these technologies have been mixed, insofar as regulations are concerned.
- The movement to more sustainable practices and the focus on ESG principles will continue to grow in importance. Requiring reports on a company’s sustainability impact, such as the one implemented by the Johannesburg Stock Exchange, will make people focus more on sustainability than in previous decades.
The episode also takes a closer look at specific regulatory actions, as well as the impact of the COVID-19 pandemic on institutional and consumer behavior.