Access to Banking and Insurance in Africa and the Role of Technology
Africa may be the most underbanked continent in the world, but access to financial markets is gaining momentum, thus presenting a myriad of opportunities – and risks. A team of experts share their views on this topic with Africa Legal’s Tom Pearson.
With their vast experience in the fields of financial services, insurance law and data protection, Webber Wentzel law firm partners Dawid de Villiers and Zelda Swanepoel, together with senior associates Portia Mashinini and Wendy Tembedza, analyze the opportunities and risks that entities could encounter when accessing the financial services markets.
Dawid says that while Africa’s status as the most underbanked continent might be suggestive of it being an obstacle to the evolution of the financial sector, when compared to the level of penetration by telephony, statistics paint a more optimistic picture.
In this vidcast, part of the Access Insights Series, he provides an overview of the trends that have occurred as a consequence of the high penetration of mobile phones, and suggests that Africa is making optimal use, within available resources, of technology. In many instances, innovative people on the continent have managed to leapfrog their competitors.
Tom pointed out that the mobile telephony space is a fascinating one when you have an entire demographic banking via a device that travels with them everywhere they go. Once they are banked, the opportunity to access additional products and services is almost unparalleled.
Zelda in turn highlighted that the insurance industry in South Africa has been subjected to significant changes since 2013 and the evolution process is still ongoing. This is being done with a view to enhancing fair consumer outcomes, but changes to the regulations, specifically in South Africa, come with a high threshold for compliance. She says it will be interesting to see whether the legislative developments stifle or enhance access.
Portia elaborated on the need for regulators not to be too stringent in how they regulate forthcoming changes as this will discourage innovation. There needs to be a sufficient balance between the different interests, she says. This balancing act is however proving to be very difficult in an era of a particular focus on positive consumer outcomes.
Wendy ended the discussion with her views on data protection and ways in which businesses can ensure that their innovations don't see them fall foul of data protection regulations when granting consumers access to financial services through various means.
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