The fintech landscape has advanced significantly since the pandemic first broke, driven by remote workforces and the need to address financial inclusion. With the government in support of pro-innovation and active efforts to ensure sound governance and regulation for enterprises to partner with and adopt emerging technologies and products, Absa’s WorkInProgress initiative is accelerating the continent’s digital adoption through strategic partnerships.

Michelle Anderson, head of strategy: information technology office at Absa Group, is driving WorkInProgress, which has morphed from its origins as a physical accelerator programme, to a virtual collaboration hub, designed to unlock digital innovation and facilitate business value propositions within the Absa ecosystem, and more so among start-ups. ‘The start-up ecosystem in Africa realised $1.43 billion in venture capital [VC] investments in 2020 […]. Although it was a decrease of 29% compared with 2019, the growth in the number of equity seed rounds has increased by 88% for the same term. This clearly demonstrates the significant acceleration in African start-ups,’ she says. ‘Of the total VC equity funding per country in Africa, South Africa places fourth, with $259 million. And of the total VC funding in Africa last year, 31% was directed towards fintech. Although we see a 6.7% reduction since 2019 because of the pandemic, there remains an increased demand for such services.’

Another huge disruptor in the fintech space has been created by the US regulatory environment, which allows big tech companies to become lenders, driving their interest in financial-services offerings. ‘This will result in significant pressure and opportunities for larger, incumbent financial services institutions in SA to innovate and partner,’ says Anderson.

The most prevalent digital activities in the fintech landscape are mobile digital payments and electronic currency adoption, which creates opportunity for competition in new and expanding revenue streams. Channels for payment, such as QR codes, have experienced considerable growth, as has e-currency adoption, which sees cryptocurrency popular in commercial transactions in Africa. ‘What this is telling us is that we need to unlock innovation, and our virtual network of partners is Absa’s vehicle through which we collaborate and partner with start-ups in our ecosystem. The value we provide goes beyond helping them with their banking needs. We introduce them to insights into problems we are solving in Absa and, importantly, provide them with a platform to connect them to our global and local corporate client network so they can form joint value propositions.’

Since moving to a virtual network last year, Absa has realised many benefits from its partner networks, be those corporate or start-up. For example, it has access to an active pipeline of potential partners aligned to its business strategy, with representation from across Africa and the globe. There is also far more activity in partnering with those that assist Absa to expand its payment offerings, aligned to their strategy

‘The result is many proof-of-value concepts are being executed with partners aligned to business priorities. These are aimed at delivering capabilities such as conversational banking, channel marketing and attribution, cross-border remittances, e-commerce, remote working, digital adoption, hyper personalisation, and a cloud-enabled contact centre,’ says Anderson.

In effect, WorkInProgress plays a shaping role in society, which is a key pillar in Absa’s strategy. The initiative strongly supports women in technology, and hosts solvathons and hackathons to address socio-economic problems, such as the water crisis in Cape Town some years ago. It has run events on the sidelines of the WEF to address business problem statements from start-ups. ‘We host launch events for our members, such as that in 2019 where we introduced the Mission Billion Challenge, which addressed financial inclusion in Africa,’ says Anderson. ‘Another activity is our roundtable discussions with customers, such as bringing together the agri sector with academia, to understand employment and skills implications of the 4th Industrial Revolution, and how to move forward. What these actions do is to facilitate high-speed solutioning and co-creation through intensive collaboration among people of diverse backgrounds, with diverse skills, and often from diverse sectors.’

This is the same approach in how Absa approaches its digital partnerships. ‘We believe that small business is key to economic growth and shared success. We are passionate about building necessary digital skills for Africa.’ An example is that of the Absa Cybersecurity Academy, which in partnership with the Maharishi Institute, aims to help address the worldwide cybersecurity-skills shortage. It is an externally focused CSR initiative that empowers marginalised SA youth to become certified cybersecurity specialists.

‘Absa has been a progressive part of SA’s fintech journey and has immersed itself deeper with its introduction of a digital partnerships capability in 2020 to formalise this work,’ says Anderson. ‘We’ve learnt an incredible amount about the endless opportunity and innovative products and services that fintech creates in facilitating and creating an active pipeline of strategic partnerships.’

By Kerry Dimmer