AI Revolution: Reshaping African FinTech and Driving Growth

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What are our Future FinTech Champions learning at the moment? And what are their thoughts on the current development of FinTech? Read through this submission from one of our FFCs, Gaurav Hurnaum, currently studying a Bachelor of Commerce: Accounting and Finance @ Curtin University [Submission made in September 2023].

Artificial Intelligence (AI) is making waves all around the world and the founder of Microsoft, Bill Gates considers AI as the most groundbreaking technology in recent times (Gerken 2023).

Artificial Intelligence (AI) stands at the forefront of a technological revolution, by redefining how we interact with machines and data and fundamentally reshaping various aspects of human life around the globe. The technology combines computer science along with strong datasets, to allow computers and machines to solve problems and make decisions that normally would require human intelligence (IBM 2023). From automating routine tasks to enhancing medical diagnoses, optimizing financial strategies, personalizing user experiences, and even revolutionizing transportation through self-driving cars, AI can have a significant impact across various sectors.

Notably, the African FinTech industry is embracing AI, marking a strong example of how this technology is contributing to progress and innovation on the African continent.

The AI landscape encompasses two primary domains: machine learning, and deep learning.

(Source: Coursera)

The widespread adoption of Open AI’s ChatGPT, reaching 100 million users in under 2 months (Hu 2023), has greatly increased awareness of the concept of Artificial Intelligence, more specifically, Generative AI. However, text generation is only a part of AI, particularly a Large Language Model (LLM). There are other AI tools such as Midjourney (text-to-image), Eleven labs(voice) and Synthesis AI (data generation) amongst others.

On the AI side, according to the Vice President of Ghana, Mahamudu Bawumia, Africa and the Middle East will be witnessing the fastest rise in AI spending globally, up to $6.4 bn by 2026(The Guardian 2023). 

On the FinTech side, the Global Financial report 2023 predicts that African fintech industry will be growing by 32% CAGR to $65 billion in 2030(Akuchi 2023).

Hence the revolution in AI can have a significant impact, in terms of driving the growth of the African FinTech Industry. 

Overview of the FinTech Landscape in Africa

Over the past years, Africa has been witnessing a “fintech eruption”. In 2020 only, the African Fintech revenues reached an estimate of $4 to $6 billion with average market penetration for the FinTech ranging from 3% to 5% (Flötotto et al. 2022). The fintech industry in Africa is pooling investments around the world, with increasing average deal sizes and a higher percentage of funding offered to African startups in such an industry, boosting productivity and economic growth. As per Africa: The Big Deal report, Fintech is the fastest growing entrepreneurship domain, absorbing 54% of known startup funding in 2021. The young growing African population of 1.4 billion people coupled with increasing smartphone ownership, declining internet costs and network coverage at scale, all offers a favorable FinTech environment.

According to Alliance for Financial Inclusion (AFI) in 2021, payment services, both domestic and cross-border remittances, are the most common FinTech service in the region. 

Moreover, according to a McKinsey&Company Analysis, different countries have different leading FinTech services or possess different market characteristics and based on these, they can develop new opportunities in the FinTech space, as follows:

(Source: McKinsey&Company)

Benefits of AI in African FinTech:

1. Personalised Customer Experience 

AI can help African fintech companies achieve growth by analysing user data and providing a personalised user experience. Through data entered such as financial expectations, preferences and targets, the companies can provide specific financial recommendations to users. This will enhance efficiency and improve customer satisfaction. Conversational AI platforms such as Watson Assistants provide companies with the possibility to build these virtual assistants to automate customer service responses with great accuracy.

For example, Kuda Bank being a Nigerian fintech Neobank startup, makes use of AI-powered chatbots to answer customer queries 24/7 with immediate real-time responses relating to their account balances, transaction details and payment history (Price 2023). 

 AI-powered algorithms can also be used to provide automated financial advice through robo-advisory services. Robo advisors use a machine learning model where financial data entered by the user will be compared with trained labeled data, to analyze the user’s risk appetite, predict credit scores and provide personalized investment strategies. 

There also exists voice bots, using AI and Natural Language processing (NLP), which can answer client queries by speaking (Microsoft Corporation 2022) and this allows for more customer service service flexibility, especially in case of very specific or complex queries.

With the ongoing revolutions in artificial neural networks in deep learning as subset of AI, the FinTech payments and advisory space in the future is expected to give an even more human-like approach in answering specific investment queries. This will drive more growth and innovation in African FinTech Industry, especially with the transformative concept of Artificial General Intelligence(AGI).

2. Empowering African FinTech security

Artificial Intelligence, in the form of machine learning models such as decision tree and clustering, can learn patterns based on large datasets and identify anomalies that could result in fraud or high-risk transactions.  Timely warnings can be provided. This can even be applied in Natural Language Processing models where from the chat-bots, suspicious keywords can be identified and trigger possible attempts of fraud. 

Fintech companies, for example Cowrywise in Nigeria, apply AI through time-series and technical analysis to data which facilitates assessment of creditworthiness, eases loan processing applications and ensures compliance to regulations. 

The Central Bank of Rwanda created the Electronic Data Warehouse (EDW), to retrieve data from the IT systems of financial service providers including regulated FinTech firms in real time (Kamali and Randall 2017). Automated AI tools such as Machine Learning and predictive analytics can be used to analyze the large amounts of data stored in these databases and keep track of market trends, identify patterns, and predict potential risks to the banking industry.

The increasing capabilities of AI and the strict banking regulations increase pressure on supervised FinTech firms in Africa to improve their risk management systems and monitoring of compliance procedures.

Robust risk management frameworks adopted by African FinTech using AI technologies, can speed up risk procedures, reduce costs and identify cases of fraud. These FinTech companies are in turn monitored by financial institutions using advanced AI-powered RegTech(regulations and technology) and SupTech(supervision and technology) tools. This ensures transparency and security in the African FinTech economy, therefore encouraging clients to use services provided by the FinTech companies.

3. Financial Inclusion 

According to Africa Investment Report 2021, around 65% of Africans remain unbanked or underbanked. The IMF Financial Access Survey in 2020 reports 229 million registered e-money accounts as compared to 211 million accounts in commercial banks and NBFIs. This gives the opportunity for FinTech companies to use AI to drive financial inclusion by catering for the unbanked African entrepreneurs and community.

JUMO, market leader in Banking as a Service, is a South African tech company that uses AI to encourage the adoption of financial services in emerging markets across Africa. It provides saving plans, credit facilities and financial infrastructure to FinTech platforms and e-Money service providers (Wright 2023). Unify is the company’s Artificial Intelligence processor that uses the data collected to make decisions, and in October 2022, JUMO launched VELA, an asset management tool allowing investors access to impact investments under strict governance procedures. Through the powers of machine learning, VELA can also allocate multi-currency funds whether in USD or cryptocurrency to certain portfolios. JUMO has used AI in its business operations and has, as of date, provided 130 million loans to over 20 million Africans and small firms across six African economies.

Furthermore, as previously mentioned, AI chatbots and robo advisors can understand and provide immediate response to client queries, thus having more access to the underserved population and their needs.  African FinTech companies are also using AI technologies to consider other data sources such as social media, mobile phone usage and payments in determining users’ credit worthiness.

Challenges of AI in African FinTech:

1. Data Collection in Africa

Data is of paramount importance for AI-based algorithms. It enables them to train their learning capabilities to provide accurate information, to reflect user patterns and in alignment with market trends, make instant appropriate decisions.

Nevertheless, despite the fintech eruption in Africa, it is important to note that 90% of transactions are still cash based (Menon 2023). Therefore, it becomes difficult to accumulate digital data for AI-led analysis and achieve growth in the Fintech sector. This has led to Fintech payment companies having to charge a higher service fee to cover costs due to low market share and low ARPU (Average revenue per user).

Africa still faces what the then-chief economist of the World Bank for Africa, Shanta Devaranjan, called in 2013, “A Statistical Tragedy” (Devarajan 2013).  Since 2018, credit details of only 11% of the African population were recorded in the private credit bureaus.   Added to that, in countries like Cote d’Ivoire, Cameroon, Tanzania, and Nigeria, over 40% of the population is not even formally registered (McKinsey&Company 2022). This makes it difficult for African FinTech companies to collect both online and offline user data to properly understand credit risks before disbursement of financial resources, comply with regulations and achieve growth due to limited business partnerships.

The training data being used in AI need to be representative enough for proper analysis but given the lack of data being faced by African FinTech, using AI to make decisions based on such data, can be costly and in some cases, unreliable.

However, there are global organizations uniting African market leaders and collecting market intelligence especially in rural Africa through “mappers”. More of such measures can help the African FinTech industry have more accurate data for proper analysis through AI algorithms.

2. Ethical Challenges in using Artificial Intelligence

In the African FinTech environment, the ethical risks posed by Artificial Intelligence can be very critical. There can be AI systems that do not adhere to cultural and ethical principles, and which could lead to resistance in FinTech adoption. The accuracy of the systems based on the data collected and the legal frameworks relating to AI, could make it difficult for African FinTech companies to make appropriate strategic business decisions. 

It is important to note different African economies are in different stages when it comes to a proper FinTech environment and adoption. African countries with more robust financial systems and access to digital infrastructure are likely to witness more innovation in the FinTech space and AI will be playing a bigger role. This may cause a digital divide between countries with limited access to AI tools and infrastructure.

The costs to established FinTech companies in adopting the latest AI technologies are to be evaluated by both the companies and legal entities, considering the impact and risks on business performance and the workforce.

Recently, the EU has passed a law on AI regulations and the USA has conducted a blueprint for an AI Bill of Rights, focused on data privacy and safety systems. This may impact investors funding African FinTech including those making use of AI, given 70 % of venture capitalist funding in African FinTech comes outside the continent, particularly from North America (McKinsey&Company 2022). Furthermore, the AI regulations and legal framework in the different African countries, must be well understood and adhered to before the use of the technology by African FinTech.

The case of AI in Mauritian FinTech

Mauritius, through its robust financial services sector and a thriving International Financial Centre for over three decades, stands poised to capitalize on innovative technologies like AI within its  FinTech landscape. Notable players in the FinTech arena, including FundKiss in peer-to-peer lending and Bank One’s POP driving a payments revolution, show that the Mauritian FinTech environment is growing well and there is great potential for AI-powered advancements in that Mauritian FinTech environment. The Minister of Financial Services and Good Governance, Honourable Mahen Kumar Seeruttun, spoke at the FinovateFall 2023 in New York on how Mauritius is working together with UNECA to set up a FinTech City and Mauritius is also planning to set up a National FinTech strategy for a proper roadmap into the future Fintech space.  AI being the latest technological revolution, will play a pivotal role in these new FinTech developments. Hence, there is optimism about AI in the Mauritian FinTech sector but the ethical risks and uncertainties could imply that widespread AI integration might take considerable time to become feasible and reliable. 


The AI revolution in African FinTech holds the promise of significant transformation and growth. Embracing AI technologies can drive financial inclusion, efficiency, and accessibility across the African continent. However, to make the best use of these opportunities, proactive measures must be taken to address the risks and data collection issues, ensure ethical practices, and comply with emerging AI laws and regulations, paving the way for a successful and inclusive AI-driven FinTech ecosystem in Africa. 


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Devarajan, Shantayanan. 2013. “Africa’s Statistical Tragedy.” Review of Income and Wealth 59 (January): S9–15.

Flötotto, Max, Eitan Gold, Uzayr Jeenah, Mayowa Kuyoro, and Tunde Olanrewaju. 2022. “Fintech in Africa: The End of the Beginning | McKinsey.” August 30, 2022.

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