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From the CEO’S Desk: September 2019

The recent outbreak of xenophobic violence in South Africa has once again highlighted the urgency of our mission – to create a more stable, inclusive Africa. A lack of economic growth, soaring unemployment rates and the ever-present spectre of corruption create the conditions that open the door for the kind of nationalist, insular rhetoric that has sadly become more and more prevalent over the past few years. Now more than ever it is imperative for us to break down the barriers between us and emphasize collaboration, both regionally and across the continent. We have so much to offer, and ultimately Africa can only succeed if we pull together, not apart.

Our focus this month is on the financial sector. In an environment of huge change and challenge, with the Fourth Industrial Revolution just around the corner, innovation and lateral thinking are essential. The banking and investment landscapes are being revolutionised by technology, which opens doors to financial inclusion and impact at scale in so many ways. As the keepers of the purse strings, the financial sector has a disproportionate ability to empower and uplift millions through strategic investment decision-making, as we see in the case study from SVAI Founding Member Old Mutual shared in our newsletter.

According to PwC, “banks are becoming more strategically focused and technologically advanced to respond to customer expectations, while deploying defensive strategies to protect market share against traditional competitors and new entrants. As such, the importance of product and channel innovation and developing new solutions that take advantage of this progress – in data, advanced analytics, digital and new delivery platforms – has never been more important.” These new solutions often take the form of mobile banking solutions, such as HF Group’s recently launched WhatsApp banking solution in Kenya. Leveraging cloud communication and AI through strategic partners, consumers can open virtual account, transfer funds, access loans, pay bills and purchase goods through the encrypted messaging system.

Also in Kenya is the go-to example of a disruptive technology in the financial services industry – SVAI Founding Member Safaricom’s M-Pesa, the mobile phone-based money transfer and financing service. Since M-Pesa was launched in 2007, Safaricom have continued to innovate and create new ways to drive financial inclusion. As a result, Kenya is ranked as having one of the highest rates of access to financial services. This is no fluke – through innovative, Shared Value thinking about how people can be connected with the broad spectrum of financial services, business clearly is in the driver’s seat in moving Africa forward.

As the UN General Assembly takes place in New York, the United Nations Secretary-General’s Special Advocate for Inclusive Finance for Development (UNSGSA) Queen Máxima of the Netherlands spoke on the importance of continuing to drive financial inclusion. She spoke about how, with 1,7 billion people around the world still excluded from financial systems, “technology presents today our best chance to reach these people, by scaling quickly, reaching them affordably, and reaching them with better products”. New financial technologies have immense potential to extend financial inclusion, but the queen noted that they must also be supported by investment in building financial literacy and addressing the risks that the digital paradigm shift brings. Ultimately, “we need to think beyond access and more of financial health”.

This underlines our belief at the SVAI in the power of the financial services industry to create change at scale through the implementation of Shared Value strategies. Our members are proof that it is not just possible but profitable for businesses in every part of the financial services industry to take on social challenges. Especially given how much power this industry can wield, it is more important for financial organisations to recognise and action their responsibility to support and invest in the communities that will ultimately support them in the future.

Onwards and upwards!
Tiekie Barnard
CEO, Shared Value Africa Initiative