African banks are poised for major growth. Here’s how.

by Brian Richardson, CEO of WIZZIT International
MARCH 20, 2018

african banks

African banks are poised for major retail growth. As of 2017, there were almost 300 million banked Africans, up from 170 million in 2012. While McKinsey & Company predicts this figure will reach 450 million by 2022, this is only a third of the population.


This is a massive opportunity for branchless banks and FinTech companies alike. The bureaucracies of traditional banks and the requisite paperwork to open a bank account – let alone access to a credit card – financially excludes mass markets. Branchless banks on the other hand, give this under-served, non-credit card market the tools to transact online.


What’s more, there is outsized potential for African banks that can negotiate regulatory approval to enter and create winning business models. Retail banking revenues across the continent will grow at a compound annual rate of 8.5% between 2017 and 2022. The growth rate of banked Africans is highest in Ghana, Cote d’Ivoire and Kenya, with an annual average of 14% growth between 2011 and 2016. The rate of expenditure is following that trend, growing at 17% in 2016. This could spread across the continent.


But, their success will depend on how bold banks are willing to be in innovating branchless technology to overcome the continent’s challenges. These include low-income populations and widespread use of cash. This demographic want to transact online but don’t have the necessary financial services. If banks roll out low-cost models and innovative partnerships, then their growth will be even faster than the 8,5%.


With the highest cost-to-asset ratio of any region in the world, Africa’s banks must act now to create simpler, leaner banking models that move beyond the status quo and go digital. Approximately 40% of the African banking customers surveyed in McKinsey’s report on “African retail banking’s next growth frontier”, prefer to use digital channels for transactions.

A number of the continent’s leading banks have been making progress through end-to-end digital transformation, sales productivity and back-office optimisation. But there is a significant number of people still putting their money under mattresses and without financial services.


Banks can adopt three strategies to tap into this market:

1. Digitally transform their existing operations to grow their share of digital sales and transactions.
2. Collaborate with Mobile Network Operators or FinTech companies to deliver mobile financial services to their clients at a cost below that of the branch network.
3. Build a digital bank from scratch.


WIZZIT International has 12 years’ experience in digital financial services and can assist banks to capitalise on the opportunities that exist.


To discuss it further, please contact Brian at brianr@wizzit-int.com




WIZZIT International



Brian Richardson is the co-founder and group CEO of WIZZIT International. Brian is recognised globally as a disruptive innovator in the financial services space. He's fostered powerful partnerships with major FSPs around the world to advance mobile banking technology.