Close Menu
TechCentralTechCentral

    Subscribe to the newsletter

    Get the best South African technology news and analysis delivered to your e-mail inbox every morning.

    Facebook X (Twitter) YouTube LinkedIn
    WhatsApp Facebook X (Twitter) LinkedIn YouTube
    TechCentralTechCentral
    • News

      The little-known company disrupting Eskom’s monopoly

      16 June 2025

      TechCentral Nexus S0E2: South Africa’s digital battlefield

      16 June 2025

      AI and the future of ICT distribution

      16 June 2025

      Beijing’s chip champions blacklisted by Taiwan

      16 June 2025

      Chief sub-editor wanted – help shape South African tech media

      16 June 2025
    • World

      Yahoo tries to make its mail service relevant again

      13 June 2025

      Qualcomm shows off new chip for AI smart glasses

      11 June 2025

      Trump tariffs to dim 2025 smartphone shipments

      4 June 2025

      Shrimp Jesus and the AI ad invasion

      4 June 2025

      Apple slams EU rules as ‘flawed and costly’ in major legal pushback

      2 June 2025
    • In-depth

      Grok promised bias-free chat. Then came the edits

      2 June 2025

      Digital fortress: We go inside JB5, Teraco’s giant new AI-ready data centre

      30 May 2025

      Sam Altman and Jony Ive’s big bet to out-Apple Apple

      22 May 2025

      South Africa unveils big state digital reform programme

      12 May 2025

      Is this the end of Google Search as we know it?

      12 May 2025
    • TCS

      TechCentral Nexus S0E1: Starlink, BEE and a new leader at Vodacom

      8 June 2025

      TCS+ | The future of mobile money, with MTN’s Kagiso Mothibi

      6 June 2025

      TCS+ | AI is more than hype: Workday execs unpack real human impact

      4 June 2025

      TCS | Sentiv, and the story behind the buyout of Altron Nexus

      3 June 2025

      TCS | Signal restored: Unpacking the Blue Label and Cell C turnaround

      28 May 2025
    • Opinion

      Beyond the box: why IT distribution depends on real partnerships

      2 June 2025

      South Africa’s next crisis? Being offline in an AI-driven world

      2 June 2025

      Digital giants boost South African news media – and get blamed for it

      29 May 2025

      Solar panic? The truth about SSEG, fines and municipal rules

      14 April 2025

      Data protection must be crypto industry’s top priority

      9 April 2025
    • Company Hubs
      • Africa Data Centres
      • AfriGIS
      • Altron Digital Business
      • Altron Document Solutions
      • Altron Group
      • Arctic Wolf
      • AvertITD
      • Braintree
      • CallMiner
      • CYBER1 Solutions
      • Digicloud Africa
      • Digimune
      • Domains.co.za
      • ESET
      • Euphoria Telecom
      • Incredible Business
      • iONLINE
      • Iris Network Systems
      • LSD Open
      • NEC XON
      • Network Platforms
      • Next DLP
      • Ovations
      • Paracon
      • Paratus
      • Q-KON
      • SkyWire
      • Solid8 Technologies
      • Telit Cinterion
      • Tenable
      • Vertiv
      • Videri Digital
      • Wipro
      • Workday
    • Sections
      • AI and machine learning
      • Banking
      • Broadcasting and Media
      • Cloud services
      • Contact centres and CX
      • Cryptocurrencies
      • Education and skills
      • Electronics and hardware
      • Energy and sustainability
      • Enterprise software
      • Fintech
      • Information security
      • Internet and connectivity
      • Internet of Things
      • Investment
      • IT services
      • Lifestyle
      • Motoring
      • Public sector
      • Retail and e-commerce
      • Science
      • SMEs and start-ups
      • Social media
      • Talent and leadership
      • Telecoms
    • Events
    • Advertise
    TechCentralTechCentral
    Home » Banking » Banks scramble to catch telcos in Africa financial services race

    Banks scramble to catch telcos in Africa financial services race

    By Agency Staff9 December 2021
    Twitter LinkedIn Facebook WhatsApp Email Telegram Copy Link
    News Alerts
    WhatsApp

    When Joyce Rejista ran out of money at a music festival, she found herself in a familiar fix for villagers across Malawi, needing cash in places where banks and ATMs are scarce.

    The obvious answer was a mobile money service run by telecommunications companies Airtel or TNM, which have leveraged widespread mobile phone networks to amass more account holders than Africa’s major banks.

    But when Rejista, 28, tried a friend in Malawi’s commercial capital of Blantyre for help, he told her to sign up to a new Standard Bank service so he could send her the money.

    The continent is one of the world’s most attractive banking opportunities as incomes rise

    After long-ignoring mobile money’s target market in favour of higher-income Africans who they can serve their more lucrative traditional products, Africa’s traditional banks are now looking to elbow their way into telco territory.

    Since much of Africa’s population has limited access to financial services, the continent is one of the world’s most attractive banking opportunities as incomes rise.

    While bank revenues dwarf those from mobile money, in terms of user numbers the latter is a clear winner. As telcos go after a growing number of banks’ revenue streams, they can no longer overlook their success.

    Standard Bank, Africa’s largest lender by assets, is rolling out its mobile money-style product, called Unayo, across the continent and aims have it in all its markets by end-2023, Wally Fisher, the head of the service, said in an interview, adding it is also focused on bringing online services like lending.

    Meaningful share

    Unayo aims to win a meaningful share of the mobile money market in the near term and believes it can capture at least 1% of around US$90-billion in remittance and donor aid payments made every year in its markets as revenue, Fisher said. “It can very quickly result in quite a meaningful contribution to the bottom line in the next two to three years.”

    In Malawi, fewer than 170 of every thousand adults has deposits in a bank account, whereas nearly 600 have a mobile money account, according to 2019 IMF statistics.

    And across the continent, there were 548 million registered mobile money accounts in 2020, according to industry body, the GSMA.

    While banks have looked to partner with telcos, marrying their licences and lending expertise with massive mobile networks, the operators are increasingly looking to offer lending, insurance, savings and more without their help, and ramped up efforts during the pandemic.

    Orange got its own banking licence, while others partnered with smaller banks. MTN and Airtel can now collect deposits in Nigeria, which is Africa’s most populous country.

    Making financial services accessible without traditional infrastructure is a key criteria for success

    Banks are following their lead. Fisher said Standard Bank would pursue partnerships where they add value but was focused on building Unayo for now.

    Nedbank is discussing partnerships but also looking to offer products itself where it sees opportunities, its head of retail transactional, forex and investments, Vanesha Palani, said.

    While it only operates its mobile money-style offering in South Africa, Nedbank is looking to expand it across the continent in the near-term and enable new services like lending and cross-border remittances, Palani said.

    Read: Standard Bank throws down the gauntlet to M-Pesa

    But pursuing solo strategies too aggressively risks damaging the potential to forge partnerships critical to growth in many markets, head of card and payments for Absa’s regional operations, Vinolan David, said.

    Nevertheless, the bank has now built its own standalone product and is planning to launch it in countries including Zambia, Tanzania, Ghana and Uganda in the coming months.

    Old-school banking services won’t cut it in Africa

    While partnerships still dominate, a growing number of banks are pursuing standalone strategies on mobile wallets and lending, said Francois Jurd de Girancourt, head of McKinsey’s financial institutions practice for Africa.

    Making financial services accessible without traditional infrastructure is a key criteria for success.

    As well as mobile phones, telcos recruit networks of “agents” — often small shops or street sellers — who can offer key services like cash-in or cash-out even in rural areas.

    Unayo is building its own agent network, and has signed on more than 6 500 in Malawi, and over 50 000 users so far, Fisher said.

    Nedbank is also looking to get small or informal traders on board. This also brings business banking opportunities that could make its mobile wallet a decent revenue generator, Palani added.

    The jury is still out as to whether bank offerings are going to be sufficient … to really compete with the telcos

    Absa’s David said its experience so far had shown the quickest route to user growth was partnering with a telco. Telcos already have huge numbers of unbanked people on their phone networks, access to unique data for lending and, in many countries, a head start.

    Banks, on the other hand, can offer a wider range of services, face fewer limits on things like transaction size or frequency, and can leverage existing relationships, for instance getting a big business customer to pay wages via their wallets.

    The winners will be those that can achieve scale and quickly roll out new products to meet customer needs, something mobile money providers have been good at, Jurd de Girancourt said.

    “The jury is still out as to whether bank offerings are going to be sufficient … to really compete with the telcos.”  — Frank Phiri and Emma Rumney, (c) 2021 Reuters



    Absa Airtel Francois Jurd de Girancourt Nedbank Standard Bank TNM Unayo Vanesha Palani Vinolan David Wally Fisher
    Subscribe to TechCentral Subscribe to TechCentral
    Share. Facebook Twitter LinkedIn WhatsApp Telegram Email Copy Link
    Previous ArticleUS private equity giant in ‘significant’ investment in SA’s E5ntersekt
    Next Article Technology and innovation are paving the way to a better 2022

    Related Posts

    South Africans hit by wave of sophisticated banking scams

    28 May 2025

    Rising subscription costs creeping up on household finances

    20 May 2025

    Company behind South African-built geyser claims up to 84% energy savings

    15 May 2025
    Company News

    Huawei Watch Fit 4 Series: smarter sensors, sharper design, stronger performance

    13 June 2025

    Change Logic and BankservAfrica set new benchmark with PayShap roll-out

    13 June 2025

    SAPHILA 2025 – transcending with purpose, connection and AI-powered vision

    13 June 2025
    Opinion

    Beyond the box: why IT distribution depends on real partnerships

    2 June 2025

    South Africa’s next crisis? Being offline in an AI-driven world

    2 June 2025

    Digital giants boost South African news media – and get blamed for it

    29 May 2025

    Subscribe to Updates

    Get the best South African technology news and analysis delivered to your e-mail inbox every morning.

    © 2009 - 2025 NewsCentral Media

    Type above and press Enter to search. Press Esc to cancel.