AFRICA
London leverage, Africa awareness
Stella Okuzu, head of private and business banking services at FCMB Bank (UK) in the City of London, weighs up the balance between technology and human interaction in financial services
Having had the benefit of working in the financial services sector for several years, both in Sub-Saharan Africa and in the City of London, the emergence of fintech and the increased attention on Africa as an emerging market have provided the opportunity to determine how growth in financial technology and increasing wealth in Africa could impact each other. With specific reference to the provision of banking services to high-net-worth clients in Africa, a $100,000 annual revenue and/or a $1m net asset-base amounts to a lot. This is based on the fact that the cost of living across the continent is generally lower than in the UK or the rest of Europe. For example, consumer prices in London are 85.84% higher than in Lagos (without rent) and consumer prices, including rent in London, are 21.70% higher than in Lagos. The typical profile of an affluent African is
I Africa has witnessed phenomenal digital
progress. Between 2010 and 2017, internet access more than doubled. This greater connectivity is largely within the youth population of the continent, though. Youth in Africa constituted 19% of the global youth population in 2015, numbering 226 million. The United Nations estimates that, by 2030, youth will constitute 42% of the continent’s population. With these statistics in mind, it is to be
that of a very well-educated person, having attended some of the most respected educational institutions around the world, widely travelled globally and financially savvy. This is a customer segment that is expected
to grow substantially. Total private wealth held in Africa is expected to increase by 30% over the next 10 years, reaching $2.6trn by 2030. This is expected to be led by strong growth in the billionaire and centimillionaire segments in particular. The downside, however, is that the current average age of billionaires in Africa is 62. A 62-year-old is at best a digital immigrant, having learnt the use of a computer at some point in their adult life.
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expected that the focus of wealth management from a bank’s perspective – at least over the next decade – will be on the use of technology. At the same time, the engrained culture of face-to- face meetings, which builds personal trust, will continue for the most part. Personal referrals will always be preferred over social media marketing. What we have is complementary co-existence.
Areas in which technology is expected to have a huge impact in the high-net-worth space in Africa are payments, credit decisioning, portfolio management and platform security. From the service provider’s perspective, these will act as tools to drive the efficiency of trusted banks. Customer interaction across the continent is
expected to remain through conversations in their homes or offices. And do bear in mind that when the affluent African says to you ‘we will see’, they mean eye to eye!
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