Banking Growth Insights

Open Banking (OB) is built on two layers: strategy and connectivity. 3 global approaches sit above 3 technical models - with standards as the link between vision and execution. Structure summary: 1. At the strategic level, there are 3 core approaches: regulation, market and hybrid - each reflecting different levels of public sector involvement and policy enforcement. 2. Beneath these sit 3 technical connectivity models, which define how banks and third parties interact: from fragmented, bank-specific APIs to standardized frameworks and centralized platforms. 3. This two-tier structure determines not just how OB is implemented, but how fast it scales, how easily it integrates, and how it delivers value. 𝗧𝗵𝗲 𝟯 𝗔𝗽𝗽𝗿𝗼𝗮𝗰𝗵𝗲𝘀: 1. Regulatory-led Government or regulatory authorities mandate participation in OΒ. Banks are legally required to provide access to customer data via APIs, often under strict timelines and compliance obligations. Examples: – United Kingdom (Open Banking UK) under CMA order – European Union (PSD2 and soon PSD3) – Brazil (Open Finance, led by Banco Central do Brasil) 2. Market-driven OB evolves voluntarily, driven by industry collaboration, customer demand, or commercial opportunity. Banks and fintechs choose whether and how to expose APIs, often resulting in diverse implementations and limited standardization. Examples: – United States (no federal mandate; led by aggregators like Plaid and banks like JPMorgan) – Japan (regulatory encouragement and "soft mandate") 3. Hybrid A blend of regulation and market initiative. Governments set the policy framework and sometimes define standards, but implementation is shared with industry actors. This approach balances oversight with flexibility and often includes central infrastructure. Examples: – Australia (Consumer Data Right) – India (Account Aggregator Framework) – Saudi Arabia (SAMA Open Banking Framework) 𝗧𝗵𝗲 𝟯 𝗰𝗼𝗻𝗻𝗲𝗰𝘁𝗶𝘃𝗶𝘁𝘆 𝗺𝗼𝗱𝗲𝗹𝘀: 1. Multilateral – No Standards Each bank exposes its own APIs independently, with no common format. Third-party providers (TPPs) must integrate with each bank separately, creating significant technical friction. Examples: US, parts of Asia and Latin America. 2. Multilateral – With Standards Banks still expose their own APIs, but follow a common technical standard (e.g., Open Banking UK, Berlin Group). Integration is easier, but TPPs still connect bank-by-bank. Examples:  European Union (PSD2), Australia (CDR), UK. 3. Centralized Connectivity All participants (banks and TPPs) connect to a shared platform that handles consent, routing, and standardization. This model reduces integration costs and accelerates adoption. Examples: India (Account Aggregator), Brazil (Open Finance), Turkey (Open Banking Gateway) Opinions: my own, Graphic source: Citi 𝐒𝐮𝐛𝐬𝐜𝐫𝐢𝐛𝐞 𝐭𝐨 𝐦𝐲 𝐧𝐞𝐰𝐬𝐥𝐞𝐭𝐭𝐞𝐫: https://lnkd.in/dkqhnxdg

Africa’s Next 10 Years: Where Fintech & Banks Collide — or Converge ? Over the next decade, Africa will witness one of the most radical financial transformations in the world. Mobile money transactions already exceed US $1.1 trillion annually — more than 30% of the continent’s GDP. That’s not just adoption — that’s a revolution. But what’s next? 2025–2027: Banks will shed legacy systems, embrace cloud banking, and open APIs. Partnerships with fintechs and mobile operators will surge. 2028–2030: AI-powered credit, mobile-only products, and embedded finance in agriculture, logistics, and retail will redefine inclusion. 2030–2035: Super apps, programmable wallets, and CBDC integration will blur the lines between banks, wallets, and marketplaces. Banks that survive will not look like the banks we know today. By 2035, the most successful financial players won’t be banks or fintechs. They’ll be hybrids — infrastructure providers, data platforms, and service layers rolled into one. Africa is leapfrogging again — not from cash to card, but from informal to intelligent financial ecosystems. The question isn’t if the future is digital. The question is: Which institutions will shape it? I am betting on EFT Corporation 🚀 #Fintech #DigitalTransformation #AfricaRising #MobileMoney #BankingInnovation #FinancialInclusion #AI #SuperApps #EmbeddedFinance #FutureOfFinance

"Our savings go to the USA, and with it, they buy our companies." With this powerful message, Enrico Letta has recently summarized the conclusions of his report on the future of the Single Market. The EU is home to a staggering 33 trillion euros in private savings, but this wealth is not being fully leveraged to meet strategic needs, with around €300 billion being diverted to markets abroad, primarily to the US, due to the fragmentation of our financial markets. This might seem detached from citizens' and companies' daily lives - a high finance issue that affects a few. However, it means less growth, smaller companies, and fewer resources available to fund better public health, education, and, down the road, pensions. The Banking Union is more of the same, as well as the development of a large European capital market, which would translate into more sustainable growth in Europe and better options for all its citizens. This is why the best entrepreneurs end up - mostly - setting up their new companies in the US instead of Europe. Since 2008, the American economy has grown more than twice as much as Europe. And companies in our continent suffer from a considerable size deficit; for example, Europe has almost six times fewer startups valued at over $1 billion (249) than the US (1,444) and fewer than China also, which reached 330. An essential ingredient of growth is investment, and there is no investment without credit. Europe has sound and well-regulated financial systems and enough savings to provide the financing we need. The time to deepen our Single Market and create a true Banking and Capital Markets Union is now so we can get credit flowing, grow, and secure prosperity for everyone.

𝗘𝘂𝗿𝗼𝗽𝗲’𝘀 𝗹𝗮𝗴𝗴𝗶𝗻𝗴 𝗽𝗿𝗼𝗱𝘂𝗰𝘁𝗶𝘃𝗶𝘁𝘆 𝗮𝗻𝗱 𝗥&𝗗: 𝗠𝘂𝗰𝗵 𝗺𝗼𝗿𝗲 𝗿𝗶𝘀𝗸 𝗰𝗮𝗽𝗶𝘁𝗮𝗹 𝗻𝗲𝗲𝗱𝗲𝗱 ‼️ Last week the International Monetary Fund published a very interesting and comprehensive paper about the need for more venture capital in Europe to tackle our continents challenges. To name a few: ✔️productivity per hour worked is app 30% lower in 🇪🇺compared to the 🇺🇸 ✔️R&D investments are still way below the target of 3% per annum ✔️Within the top 100 tech companies worldwide merely a handful are European Is it all about 💶 I here you say? No it is about keeping up our welfare for future generations. And about a liveable planet. And increasing our innovation and competitiveness are crucial to do so. Which is also the key message of Mr. Draghi’s report I hope. The IMF report takes a deeper dive into the underlying issues: ✔️ VC investments are only 0,4% of GDP. In the US it is 3x as much ✔️Europeans park their savings in bank accounts. And banks are very risk aversie when it comes to financing hightech startups. ✔️Long term savings go primarily via pension funds, who hardly invest in VC in Europe (despite some positive signs recently) ✔️The EU has fewer and smaller VC funds leading to smaller rounds, less opportunities for scale-up financing and limited exit options ✔️ European scale-ups end up listing in the US instead of Europe itself ✔️ National fragmentation within the EU leads to a lot of barriers for scaling What has to be done? ✅ Increase efforts on a real single European market, for example by consolidating stock market exchanges and diminishing cross border red tape ✅ Make it more attractive for pension funds and insurers to step into VC ✅ Enhance the capacity of European Investment Bank (EIB), European Investment Fund (EIF) and national promotional institutes, like Invest-NL ✅ Implement preferential tax treatments for equity investments in startups and VC funds ✅ Encourage more funds-of-funds And I would like to ad to the findings in the report two things: 1️⃣ We need a cultural mind shift, more urgency and embracing true entrepreneurship 2️⃣ We have to step up our game when it comes to tech transfer. Transforming our high quality academic knowledge into economic and societal impact via startups.

📊 What’s on the horizon for bank lending in Europe?    Our latest economic forecast, which models bank lending in the eurozone’s largest markets, signals that following two years of minimal growth, business and consumer loan demand will exceed pre-pandemic growth levels from 2025 − with interest rate falls and easing inflation expected to boost borrowing.    🏠 Almost half of European loans are mortgages, which this year are forecast to stagnate – with contractions in France, Italy, and Spain, but growth in Germany. Overall, this will be the lowest growth recorded in over a decade − impacted by high borrowing costs, tightened lending criteria, and subdued housing market sentiment.      But starting next year, mortgage growth is predicted in France, Germany, Italy, and Spain, totalling a 7% increase in borrowing by year-end 2026, provided economies grow and mortgage rate falls boost home-buying.     This is positive news for European banks, which have shown resilience through economic downturns and a succession of shocks in recent years. Looking forward, a more optimistic outlook means the focus can more confidently be on growth, innovation, transformation, and sustainability − bolstering the sector’s influence on the global stage.    👉 Read the full findings and predictions for different lending types and countries here: https://lnkd.in/ecHdSyaC and the FT’s write up by Owen Walker here: https://lnkd.in/eAiSRWhw   #FinancialServices #Banking #Mortgages 

McKinsey & Company analysis estimates that 🌍 Africa’s financial services market could grow at about 10 percent per annum, reaching about $230 billion in revenues by 2025. $150 billion excluding South Africa, which is the largest and most mature market on the continent. Nimble fintech players have wasted no time in carving out a share of this expanding market. As the fastest-growing startup industry in Africa, the success of fintech companies is being fueled by several trends, including increasing smartphone ownership, declining internet costs, and expanded network coverage, as well as a young, fast-growing, and rapidly urbanizing population. The COVID-19 pandemic has accelerated existing trends toward digitalization and created a fertile environment for new technology players, even as it caused significant hardship and disrupted lives and livelihoods across the continent. Our analysis shows that fintech players are delivering significant value to their customers. Their transactional solutions can be up to 80 percent cheaper and interest on savings up to three times higher than those provided by traditional players, while the cost of remittances may be up to six times cheaper. Taken together with an influx of funding and increasingly supportive regulatory frameworks, these factors could signify that African fintech markets are at the beginning of a period of exponential growth if, as expected, they follow the trajectory of more mature markets such as Vietnam, Indonesia, and India. Download the complete #fintechreport "FinTech in Africa: The end of the beginning" with more stats and figures through the link in the comments below👇 #fintech #africa #financialtechnology #fintechindustry #venturecapital #fintechstartups #angelinvestor #digitalbanking #digitalpayments #mobilebanking #paytech #payments #mobilepayments #fintechnews #financialservices 

From open banking to open finance New regulations stimulate growth Forthcoming regulatory adjustments stemming from the “Financial data access and payments package” primarily consists of three pillars: 🔸 the third Payment Services Directive (PSD3), 🔸 the Payment Services Regulation (PSR), 🔸 and the Financial Data Access (FIDA) Framework. These initiatives, expected to come into effect in early 2026, hold significant importance in maintaining Europe’s competitiveness and driving forward its innovation agenda. Of these pillars, the FIDA Framework stands out by aiming to establish extensive regulations governing data sharing within the financial industry, including insurance, pensions, payments, etc. Indeed, FIDA presents a multitude of opportunities for stakeholders in the industry. These range from optimizing cross-selling strategies and broadening distribution channels to enabling comprehensive financial wealth management through holistic 360-degree financial profiles. Furthermore, it unlocks innovative possibilities such as personalized financial advice, loans consolidation, customized insurance policies, efficient wealth management, etc. 👉 How traditional banks could further leverage open finance Incumbents now have two choices: simply being compliant, as most of them did when the PSD2 was first adopted, or leveraging the new regulatory requirements to their advantage through open finance. In its early phases, open finance might have appeared as a model that requires banks to make big expenses without receiving much back. However, banks that refuse to (re)act might become vulnerable to their competition in the long run, which, combined with changing customer needs may lead to losses in market share and control over their customer base. Indeed, the true potential of open banking is unfolding now, with most of the ecosystem being interconnected, enabling participants to enjoy the shared advantages of consent-based open data flows. At this stage, banks can transition from being mere data sources to leveraging information from non-bank networks to create personalized products for their customers. Tailored and extensive solutions provided by open finance are even more crucial when considering that the daily banking revenue pool in Europe is projected to increase by 16 percentage points in the next 2 years, with the majority being captured by payments and beyond banking services. With a passive approach, traditional banks risk becoming mere utilities and simple data providers for other players acting as orchestrators in the market. To avoid this, it is essential for banks to take an active approach and become orchestrators themselves. In 2024, traditional banks should definitely step up their digital game by tapping into open banking potential. 👉 Subscribe for more insights https://lnkd.in/d94JgWBU Source Zeb Consulting #fintech #openfinance #openbanking Thomas Leda Timothy Alex Ali Carlos

TymeBank (South Africa) and Moniepoint (Nigeria) have achieved unicorn status with valuations of $1.5 billion and over $1 billion, respectively, by blending digital banking with physical touchpoints. This hybrid model caters to Africa’s 90% cash-based economy and unbanked populations, overcoming barriers like unreliable internet and low trust in online-only systems. Together, these fintechs now serve over 25 million users, redefining what scaling financial inclusion looks like in emerging markets. SO WHAT TymeBank's partnership with supermarkets like Pick n Pay has enabled the deployment of over 1,000 kiosks and 15,000 retail points across South Africa, allowing it to grow to 15 million users. Moniepoint’s 200,000 agents, acting as human ATMs, bridge the gap in Nigeria, where only 16 ATMs per 100,000 adults exist, supporting over 10 million users. Both companies are expanding into Asia and broader African markets, leveraging $360 million in recent funding rounds to replicate their models. A digital-only strategy, like that pursued by Kuda (valued at $500 million), may be more scalable in regions with higher internet penetration and digital trust. However, it risks limiting market reach in areas where 43% or fewer have reliable connectivity. Think about it this way: the hybrid model embraces complexity to unlock growth in underserved regions. Could a hybrid approach redefine banking for other industries or regions, or is this model uniquely suited to Africa’s fintech challenges? What’s your take on scaling such a model sustainably? #fintech

💵 Africa’s $2.7 Trillion “Cash Market” – An Untapped Engine for Entrepreneurs Africa runs on cash. From bustling markets in Nairobi to stokvels in Soweto, over 90% of all transactions on the continent are still cash-based. That “cash economy” is massive: • $2.7 trillion total payments market • $701 billion in mobile money transactions (70% of the world’s total!) • $100 billion+ in remittances flowing into Africa annually • Informal savings groups in South Africa alone channel R50 billion ($2.7B) each year This is not a weakness—it’s potential waiting to be unlocked. 🚨 The challenge? Traceability. Cash and informal systems don’t leave digital footprints. Without data, banks and investors struggle to assess risk, limiting financing for millions of entrepreneurs who power our economies. 🌍 The opportunity? Digital traceability. Every time we move from opaque cash to traceable payments, we build a foundation for trust. With financial data, entrepreneurs can: ✅ Prove their income flows ✅ Build credit histories ✅ Access capital at scale Imagine what happens when Africa’s $2.7 trillion cash market becomes transparent enough to attract structured financing. We don’t just bank individuals—we finance entire ecosystems of entrepreneurs, fuelling job creation and economic growth across the continent. 📌 The future of African entrepreneurship isn’t just about raising more capital. It’s about unlocking what we already have, by turning the invisible into the investable. 👉 Do you believe financial traceability is the missing key for Africa’s next wave of entrepreneurs?

Speak to any bank CEO in Africa, and they'll tell you that #SMEs hold the most potential for growth. Yet, SMEs consistently report that access to #finance is their biggest hurdle. With a #financinggap as high as $300 billion and only about 20% of bank portfolios allocated to SMEs, the disparity is evident. Let’s not even go into the different definitions of “SME”. It’s the #SMEparadox: they are the drivers of growth and employment, a critical actor in a well-functioning economy and yet receive the least funding!  And for those SMEs that get funding, #interest rates are around 15-25%!! Compare that to the UK- interest rates are around 2-7%!  It gets worse for MSMEs, with MFI interest rates averaging around 27% and if you are in the agri- sector, don’t even bother!  PS:  my UK friends complaining about #mortgages,  Kenyan mortgages are 12-25% The concept that SMEs/ MSMEs in Africa need affordable financing is not new..  the global development community has been offering solutions for the last #80 years! So why are we still here? Looking at one instrument, guarantees.. in theory makes sense; offer guarantee so that banks can take more risk and lend to SMEs. The numbers reported seem impressive:  billions of $$$ unlocked and financed SMEs.. But are they really working? Can they be improved?  For example: #PolicyConstraints: Guarantees are tied to banks' existing risk-averse policies. Do they truly incentivize new risk-taking, or do banks use them for businesses they would have funded anyway? #BaselRegulations: Guarantees are not actual  cash and do not count towards capital adequacy ratios. Banks still need to show they have cash to cover potential defaults, and SMEs high-risk rated. #CreditCulture: Banks' credit teams are inherently risk-averse. Needing a guarantee can be seen as admitting a mistake, selecting  a non-performing loan. #ProfitMotivation: Banks are understandably out to make profit and if they can lend to governments etc, the opportunity cost for SMEs is too high. In Kenya, we say, "vitu kwa ground ni different"  So, what can be done? - Broaden Guarantee Use: Extend guarantees beyond banks to include fintechs. - Decouple from Bank Policies: Ensure guarantees target smaller, riskier businesses. -Cultural Shift: Introduce awards and recognition for banks and credit teams that take risks and support SMEs. -Regulatory Changes: Adjust Basel adequacy ratios to account for guarantees, reducing the capital burden on banks. Reducing the cost of credit is essential for economic growth and job creation in Africa. Table source: quick google search!