FINANCIAL INCLUSION
Are local fintech solutions the answer to boosting adoption ? Given that so many different cultural factors affect the rate of fintech penetration in any single market , it begs the question whether local innovators are better placed to provide financial services than giant tech unicorns , who might be interested in expanding to new regions .
“ Where companies offering these services often get it wrong when moving into new markets is not focusing their efforts on building a service that responds to different demographics ’ needs ,” Karen Jordaan explains .
“ It has long been the case that attitudes to banking and in particular payments are informed by national and cultural factors ,” James Cope says . “ In more developed markets , this explained the vastly different rates at which cash usage has declined – much faster in Scandinavia and the Netherlands , much slower in Germany and Japan .
“ The same applies in emerging markets with the adoption of fintech . Sometimes , the success of a particular financial technology – MPESA in Kenya being a classic example – has been hard to replicate elsewhere because it is the result of a collision of multiple local factors .”
One thing that our experts agree on is that these idiosyncrasies make it difficult for established unicorns in developed countries to expand their product to emerging nations . Instead , local founders should address specific problems and fintech unicorns should seek to take a stake in successful startups as a means of entering developing markets .
“ Rather than big players starting from scratch in other markets , we ’ re probably more likely to see them take stakes in
122 May 2023