Investing in AI will significantly grow Africa’s fintech space- report by Kora and Finextra

Africa’s fintech scene has witnessed tremendous growth over the last few years. Although millions of citizens today live without a bank account, so much has been done by companies, the government, and other industry stakeholders to close the gap. 

Consider Kenya’s M-Pesa which first emerged as a mobile money service for the historically unbanked. Today, the platform offers users the opportunity to buy goods with their data balance, credit facilities, and tons more. Despite the gains recorded by the industry, much needs to be done to ensure it survives in the long run. 

Kora, a major pan-African payment infrastructure company,  and Finextra a fintech news platform, recently collaborated on a report on the continent’s fintech ecosystem. Drawing insights from various industry experts, the report shed light on what the fintech space needs to thrive. 

The report concluded that steady investments in many revolutionary technologies including AI will enable them to offer true financial inclusion.

The continent’s economy will also benefit if the above suggestion is heeded. Regarding the report, Kora’s CEO, Dickson Nsofor said, “This white paper reflects our commitment to advancing the financial landscape in Africa and empowering businesses in the fintech industry.”  

Read also: Techstars-backed Oystr Finance wants to offer 750 million African adults a path to quick credit

Why AI is vital to Africa’s fintech scene 

Highly transformative in nature, many analysts claim AI represents the future. As such, many countries have made significant efforts to unlock its potential. Although AI doesn’t yet have an intimidating presence in Africa, companies in South Africa (736), Nigeria (456), and Egypt (246) now specialize in AI. 

In the fintech scene, AI can help companies enhance their service delivery to retain customers and attract new ones. For instance, fintechs can improve their customer support by investing in conversational chatbots. Instead of being considered a replacement for human workers, chatbots can handle repetitive tasks like answering questions relating to account balance or savings reports. 

By doing so, human support can focus on helping customers with more pressing problems. AI can also come in handy for assessing customers’ creditworthiness as part of efforts to reduce the chances of loan default. It is worth noting that AI usage comes with various concerns, particularly in the area of data privacy. 

Before integrating AI into their services, fintechs must ensure that they comply with existing AI regulations and frequently check for possible slip-ups.

Regarding the potential of AI, the report commented “To feed into the growth, national governments must take a more hands-on role in AI regulation to keep up with AI innovation and national priorities need to be met before allowing foreign influence.”