Fintech Trends in South Africa 2023

Introduction

South Africa’s financial services sector is internationally recognised as one of the most sophisticated. In the last decade, this has been complemented by a small, but fast-growing fintech sector that is transforming financial services through digitisation, streamlining or disruption. Accounting for 40% of all fintech revenue in Africa, South Africa has a relatively mature fintech market with a strong focus on development.

Fintech can improve efficiency and reduce operating costs, allow seamless, real-time customer transactions, and drive hyper-personalisation. This can improve the efficiency of the financial sector and enhance the financial health of South Africans. Fintech can solve payment, credit and remittance problems and provide accessible and appropriate financial products such as investments, savings and insurance at scale. Incumbents continue to dominate the financial sector, making it challenging for fintechs to achieve scale. This is further exacerbated by a risk-averse funding environment, a shortage of entrepreneurial skills and South Africa’s complex regulatory environment.

Outlook

Although the fintech sector young, it has seen exponential growth, with many investors having classified South Africa (and Africa) as a “unicorn” investment region. South African fintechs have increased revenue and market perception has improved. The adoption of fintech is expected to grow, mostly driven by an increasing end-consumer demand. The sector can improve financial inclusion. Regulatory institutions and government have embraced a pro-innovation stance with a harmonised approach to fintech, and clarifying the regulatory stance on emerging technologies and products.

Report Coverage

This report on fintech trends in South Africa includes information on the size of the market, fintech startups, traditional banks and fintech, regulations and the drivers of growth, trends and challenges in the sector. This is one of several trends reports produced by Who Owns Whom that include trends in mining, FMCG, construction and agri-business.