Fintechs have to look for banks who can help them scale across borders easier and also with compliance.
With financial services in emerging economies of Africa continuing to bypass traditional banking processes for more tech-enabled solutions, the number of companies in the financial technology sector has continued to grow. More fintech companies aim to scale across the continent for more reach and success.
Scaling, however, is not easy and requires a lot of partnerships and collaboration with other sectors, including the traditional banks to whom they could pose a threat. Despite the talks of fintechs coming for banks, the need for partnerships between the two financial service sectors has since been established.
This collaboration between fintechs and banks was the theme of The Ecobank Fintech Breakfast Series which was held last month in Lagos.
Among the speakers at the series was Isaac Kamuta, Group Head, Payments Services, Cash Management & Client Access at Ecobank. Kamuta spoke on two key things fintechs should look out for before seeking partnerships with banks.
Fintechs, like every other business in other sectors, often aspire to expand their operations beyond the country they first started. In Nigeria, for example, Paystack has expanded to Ghana, Flutterwave to South Africa, while Paga is another example.
Many others are still aspiring to expand, and Kamuta, in his session, advised fintechs to partner with banks with a broad reach that can help them while scaling operations across borders.
Support with compliance
Despite the value that fintechs have delivered, they are still being constrained by many regulatory requirements that are applicable to traditional banks and financial institutions. These traditional banks are used to it and often well prepared for it.
Kamuta wants fintechs to work with banks that can help them with compliance issues.