Examples of this are present throughout the continent, with traditional banking institutions working together with financial technology (fintech) firms for mutual benefit.
Sectors such as mobile payments, remittance and alternative finance have been significant growth areas for African fintech startups.
Other sectors such as online trading, wealth management and insurance are also enjoying the emergence of disruptive fintech startups that are challenging the dominance of traditional financial institutions in those sectors.
As a result, these banks are more willing to partner with fintech startups for the sake of innovation. Here are 10 ways in which African banks are partnering with tech startups to innovate.
Flutterwave – Zenith Bank and others
Y Combinator-backed startup Flutterwave is a Nigerian app that provides a modern transaction infrastructure that is designed to allow payments to be made and accepted via mobile.
The startup, which was founded by a team of ex-bankers, entrepreneurs and engineers, is partnered with 10 African banks, including the likes of Zenith Bank, Access Bank, GT Bank and Fidelity.
Numerous Fintech Startups – Barclays Africa Group
The Barclays Accelerator, powered by Barclays Africa Group, is dedicating resources and efforts towards backing fintech startups that are attempting to solve financial and banking issues within the African context.
After the program of networking, mentoring and development, Barclays continue to work closely with selected startups to explore promising new technology-based solutions that can benefit their customers.
Shyft – Standard Bank
Developed in collaboration with South Africa’s Standard Bank, Shyft allows customers to take care of all their forex needs from their mobile phone, with no need to visit a bank branch.
Customers are able to purchase and store forex, transfer funds overseas, order multi-currency physical travel cards, and create virtual cards that can be used for international online shopping, all from their mobile phone.
SnapScan – Standard Bank
SnapScan creator Firepay was formed in 2013 to apply new mobile payments technology to build innovative products. In 2014 Firepay launched SnapScan in partnership with Standard Bank, so customers could pay for things at restaurants and retailers in South Africa using their mobile phone.
SnapScan is now used by hundreds of thousands of customers at more than 32,000 physical and online merchants.
22Seven – Old Mutual
22Seven is a Cape Town-based mobile money application that was launched in 2012. The personal finance tool, backed by Nedbank’s parent company Old Mutual, connects users to their bank accounts and enables them to keep track of their spending, make personal budgets and even invest in stocks.
WizzPass – Numerous Banks
WizzPass is a visitor management and parking solution for office parks, corporate office buildings, paid parking and residential parking, enabling simplified payment for parking. The South African fintech startup works closely with banks as partners and as clients, and earlier this year raised funding from the Barclays Seeker Fund.
M-Pesa – Equity Bank and other banks in East Africa
While M-Pesa has often been seen as a rival to Kenya’s banking system, the mobile money transfer service also works with banks in the country to enable transfers from the user’s bank accounts to the M-Pesa platform, by registering for mobile banking at their bank branch.
Umati Capital and Kyatabu – Citi Bank
In 2015, Citi Bank launched a Mobile Challenge in East Africa, in which developers had to build innovative solutions based on Citi’s digital platform. Kenyan fintech startups Umati Capital and Kyatabu were eventually named among the winners of the Citi Mobile Challenge, walking away with US$25,000 each while partnering with the bank.
Co-Creation Hub – Bank of Industry
Nigerian incubator Co-Creation Hub (CcHub) partnered with Venture Garden Group, Omidyar Network and the Bank of Industry to launch the US$5 million Social Innovation Fund. The fund is aimed at supporting young entrepreneurs with solutions to local challenges. Individual startups are offered funding of between US$50,000 and US$150,000.
Fintech Startups – Chase Bank
Kenya’s Chase Bank has been a supporter of fintech innovation for the last few years, launching the SME Biz Hubs in Nairobi and Mombasa in 2015, providing space for entrepreneurs to meet and network. The bank also partnered with Kenyan incubator iHub to offer startups the opportunity to receive financial and advisory support that would assist with growth.