Finding skilled workers is a major barrier to the development of Africa’s fintech space, but the market is slowly responding. The University of Cape Town recently became the first university in Africa to offer a specialized fintech degree.
Financial services CEOs across the world are already under serious pressure because of new competition proffered by fintech startups, and facing tough decisions about whether to fight or partner with such companies.
But what makes this issue even more testing is that, even if they wanted to focus more on innovative financial technologies, they face a serious shortage of skills.
Research suggests that CEOs of financial services companies are equally concerned about the lack of availability of skills as they are about technological change, according to a recent survey published by PwC.
Seventy per cent of the CEOs said these were their main challenges, putting them ahead of cyber threats (69 percent) as the major problems for established institutions. This was a global survey, but in Africa the problem is larger.
It is very clear that traditional banking models do not work on the continent, where more than 300 million people do not even have a bank account, let alone access to other formal financial services, such as credit, savings, or insurance.
Fintech is, as a result, a very big deal on the continent. Mobile money services like M-Pesa led the way, but increasingly we are seeing more and more innovative fintech services addressing various financial needs that traditional banks have failed to.
In fact, the continent is already home to more than 300 fintech startups, which have between them raised almost $100 million over the last two and a half years, according to the recent Finnovating for Africa report released by media and research company Disrupt Africa
Africa, therefore, is clearly a fertile ground for new fintech services, but just as more established financial services companies need the relevant skills, so do they.
From the biggest bank to the smallest startup, everyone is looking for people with skills in areas such as machine learning and big data. And these people are hard to come by. Even ordinary people could do with upskilling themselves in financial technologies.
“Have you ever used money? If you answered yes, then your life will be affected by fintech,” says Chris Rawlinson, founder of South African company 42courses.
Launched last year, the digital learning startup uses gamification techniques to allow users to learn via short stories in courses provided by some of the world’s top brands.
“Everything from paying for things with your phone, to buying bitcoin, to investing in part ownership of houses, or crowdsourcing your next loan is possible with fintech. By understanding this rapidly shifting industry you will be in a much better position to take advantage of the opportunities it presents. Now is golden age for the democratisation of finance. Trust me, you don’t want to miss this one,” Rawlinson says.
After offering courses in things like behavioural economics and social media, 42courses recently launched a fintech course in partnership with Barclays.
Rawlinson says the material in the course, provided by various top banking and fintech companies around the world, will be of use to everyone from students to banking executives.
“The illiterates of the 21st century will not be those who cannot read and write, but those that cannot learn, unlearn, and relearn,” he said.
“Alvin Toffler said this many years ago, but it’s never been more applicable than in the world of finance and banking today.”
The state of the global financial industry is partly responsible for this.
“In the last 10 years, consumer confidence in banking has plummeted and new fintech companies like Monzo and Transferwise have started to grow and chip away at the establishment’s piece of the pie. Whether you are a financial veteran or a young student, understanding the fintech and its risks and opportunities is about to become crucial for success,” Rawlinson said.
By offering this sort of course, Barclays and 42courses are venturing into territory that African universities have generally failed to.
The majority of students at African universities are studying subjects that do not support the need in business for science, technology, engineering and maths, or future-oriented skills.
This means that many organizations – as demonstrated by the PwC survey – face challenges in finding appropriately-trained graduates, which is emerging as a major barrier to the development of Africa’s fintech space.
Progress has been slow, but things are moving in the right direction.
The University of Cape Town recently became the first university in Africa to offer a specialised fintech degree, designed to provide students with the necessary skills and knowledge to acquire or further a career within the modern financial services sector.
Partnerships between e-learning startups and universities are also happening, with the Saïd Business School at the University of Oxford recently partnering with South African ed-tech company GetSmarter to launch an online fintech programme, aimed at helping executives launch new fintech ventures and harness new technology to build better financial services firms.
All of these are only baby steps towards a goal of wider importance: ensuring Africa has people with the skills needed to allow fintech to fulfil its potential on the continent. But the process has at least begun, and for that we should be glad.
Tom Jackson is the co-founder of tech news and research platform Disrupt Africa and a journalist covering innovation on the continent from the Cape to Cairo.
