Striving for more inclusion, in the financial sector and legal profession

The rapid growth in the fintech and digital assets space in recent years is both a huge opportunity and the most tangible avenue that South Africa and the African continent have seen for achieving the kind of financial inclusion that’s been a government priority for decades, says Desiree Reddy, a director and Head of the Financial Services and FinTech practices at leading African law firm Deneys.

“Different jurisdictions have made varying levels of progress, but with fintechs and digital assets, we’ve seen growth that we haven’t been able to achieve, in my view, with your more traditional payment mechanisms and investment routes,” says Desiree. “A lot of people were historically excluded from the traditional financial sector because of the cost of maintaining a bank account or access to traditional infrastructures. But now with digitalisation and everyone having a phone, most people having Wi-Fi, there's a real opportunity to address those access and cost barriers in ways that weren't possible before.”

Whether its low-cost digital banks, mobile wallets, microfinancing, or cross-border remittances (which traditionally had exorbitant costs for the many African workers wanting to send money home), more and more we’re seeing fintechs being able to get the same results much faster and much cheaper, says Desiree.

The longstanding challenge, she notes, is well-known. “In South Africa, historically our legislative process is very slow,” says Desiree, noting some of the nation’s macroeconomic framework is still governed by the Currency and Exchanges Act of 1933, while the National Payments Act was originally passed in 1998.

“The legislation was designed for a world in which all payment system participants are banks, and the landscape has evolved considerably since then.  While reforms are being discussed, the current reality is that we have fintechs that have the capability to make the payment system more efficient, safer, faster, and more affordable, but they’re constrained in what they can do as non-regulated entities. Without a regulatory framework that allows them to become regulated participants, we're in a difficult position where innovation and regulation aren't quite keeping pace with each other.”

Recently, Desiree has been speaking on South African radio and sharing insights with clients and the public on the draft Crypto Asset Manual for cross-border activities issued by the National Treasury and the South African Reserve Bank on 3 August, with public comments due by the end of September.

It’s clear that Desiree is passionate about the fast-changing sector, and what it can do for South Africa and the continent in terms of financial inclusion and boosting both the economy and society. She’s found her place, after a journey she says “took many detours” - including studying to be a vet before switching to law.

Desiree has now been working at the front line of financial services in South Africa for more than two decades; first, as an in-house counsel at local offices of multinational financial services and wealth management companies, and a ‘Big Five’ South African bank, then since 2012 as a Director in the Banking and Finance practice, specialising in regulatory compliance, at what is now Deneys.

“I was fortunate to have created a little bit of a niche for myself in the banks because I worked in legal and compliance, so I was able to bring a lot of that knowledge back into private practice,” she recalls. Her in-house perspective helps her grasp the commercial imperatives that are just as vital for clients as the law.

“In-house experience teaches you that legal soundness and commercial viability have to go hand in hand. A structure that ticks every legal box but doesn't support the business objective isn't a complete solution. You learn to weigh legal advice against a broader set of priorities — and that balance is where the real value lies.”

Nowadays, as a leader with Deneys and the South African legal profession, Desiree looks to pass her insights and experience onto the younger generation.

Having entered the profession at a time when client boardrooms were far less diverse, she recognises the significance of the shift that's taken place — and the responsibility that comes with visibility. 'If my being in this role makes someone else's path even slightly easier, that's meaningful,' says Desiree, who describes her leadership style as measured and deliberate.

She appreciates that Deneys has given her the ability to be seen, and recognised for her expertise, saying it’s the culture of the firm that’s kept her there all these years.