Published by Jessica Weisman-Pitts
Posted on March 8, 2022
5 min readLast updated: February 8, 2026
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By Frank Molla, MD Sub Saharan Africa for BPC
The more the world becomes increasingly reliant on digital technology to power daily services and markets, the more digitalisation and development become further intertwined for emerging economies. As the second-largest banking market in the world for growth and profitability, Africa is an area that holds critical lessons when it comes to examining digitalisation in the developing world and its hurdles.
There have been several key obstacles that continue to haunt the African continent in terms of accelerating digital development: access, infrastructure and regulation. However, three new innovative banking players show how these challenges can be overcome.
The first challenge has been access to banking services. A significant proportion of the African population is still unbanked: 57 per cent do not have any kind of bank account. There is still a firm reliance on cash. This is encouraged by the fact that approximately 90 per cent of employment in Central, eastern and western Africa could be categorised as informal, according to the International Labour Organisation.
Cash naturally lends itself as a simple payment method when it comes to informal employment. However, with an exceptionally young population (the median age of Africa’s 1.1 billion population is 19 years old), and an urban population that is expected to triple, it is also likely that younger generations will embrace convenient new banking methods and normalise them for future generations.
A second challenge regarding financial inclusion in sub-Saharan Africa is the lack of infrastructure. Historically this referred to bank branches and physical access points for banking services, but now this refers to insufficient internet and network infrastructure required for digital banking services.
Related to this issue is that prospective customers are still asked to confirm their identity before formally joining digital financial services. In Africa, a considerable amount of the population still does not have proper identity documents. Sub-Saharan Africa makes up over half of the one billion ‘unregistered’ people worldwide, according to the World Bank. Yet these documents are crucial when it comes to registering new users online.
There is no standardised regulation to encourage fintech innovation in the continent, with regulators giving different financial services activities different regulatory treatment across jurisdictions. This makes it extremely hard for digital platforms to extend their services regionally. Ideally, there would be a more open approach to banking and financial services.
Right now, a digital-only bank can only operate by acquiring a full banking license or partnering with an existing bank to exist under a third party licence. In contrast, lighter regulatory frameworks like the E-money licence in Europe would accelerate digital development. The hope is that the African Continental Free Trade Area (AfCFTA) will encourage a standardised regulatory approach to help the growth of fintechs and digital banks.
Innovative new digital leaders have overcome the above obstacles by localising product offerings and distribution around local demand and infrastructure.
TymeBank
With no monthly fees, pay-as-you-go-banking, up to 10 per cent interest on savings, and a straightforward account opening process, South Africa’s first digital bank has signed up more than four million consumers and business customers since its 2019 launch.
To overcome challenges around access and infrastructure, it introduced a network of over 700 self-service kiosks placed in retail outlets that their target customers visited frequently. While doing their regular shopping, customers could open accounts and immediately access their own debit cards.
Orange Bank
This subsidiary introduced its digital banking proposition in sub-Saharan Africa a couple of years ago with the offerings of mobile money operator Orange Money. This has been important as that business boasts over 20 million active customers. This has been key, as it allowed Orange Bank to leverage over a decade of customer behaviour insight around money transfers.
To open an account, an individual simply needs a smartphone or USSD, a communications protocol in GSM networks that allows the sending of short text messages. This helps to mitigate the lack of sophisticated network infrastructure in parts of the region.
Kuda
As Nigeria’s first mobile-only bank licensed by the Central Bank, it is often referred to as ‘the bank of the free’ and it focuses on providing an optimum banking experience for anyone in the country. This licensed digital microfinance bank helps Nigerians maximise their money by decreasing banking fees.
With a current account and a debit card, account holders can deposit money in over 10,000 outlets across the country for free. There are also tools to help customers track their spending and saving habits. An intelligent budgeting feature shows a visual analysis of expenditure helping customers to efficiently manage their finances, which has proved popular among the bank’s local base.
There remain key hurdles to the continued widespread adoption of digital technologies across the African continent. However, as several new players have demonstrated, enormous and rapid growth can follow when inventive ways around these hurdles are incorporated into the launch and operation strategies.
About BPC
Founded in 1996, BPC has transformed over the years to deliver innovative and best in class proven solutions which fit with today’s consumer lifestyle when banking, shopping or moving in both urban and rural areas, bridging real life and the digital world. With 350 customers across 100 countries globally, BPC collaborates with all ecosystem players ranging from tier one banks to neobanks, Payment Service Providers (PSPs) to large processors, ecommerce giants to start-up merchants, and government bodies to local hail riding companies. BPC’s SmartVista suite comprises cutting-edge banking, commerce and mobility solutions including digital banking, ATM & switching, payments processing, card and fraud management, financial inclusion, merchant portals, transport and smart cities solutions.
Financial inclusion means ensuring that individuals and businesses have access to useful and affordable financial products and services that meet their needs.
Digital banking refers to the use of digital technology to offer banking services, allowing customers to conduct transactions online or via mobile devices.
Fintech, or financial technology, refers to the integration of technology into offerings by financial services companies to improve their use of financial services.
A digital-only bank operates without physical branches, providing banking services exclusively through online platforms and mobile applications.
Regulatory compliance in banking involves adhering to laws, regulations, guidelines, and specifications relevant to the banking industry.
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