Fintech has arrived and it’s changing the South African economy

The unemployment rate in South Africa is at an 11-year high, with 5.7-million people finding themselves without a job. The technological boom in the financial sector is not only making waves in innovation, but it’s also creating jobs and redefining employment roles within existing, traditional businesses.

Technology can create employment opportunities

Confidence in South Africa from a financial and investor point of view, is the lowest it has been in 5 years, according to Rand Merchant Bank’s Bureau for Economic Research. Because of the somber outlook on the South African economy, investment from the private sector has been limited, hindering job creation. The need for startups to emerge has never been more pressing.

Startups and small businesses contribute significantly to the economic and social development of South Africa by not only birthing innovation and change, but also by helping to alleviate poverty by means of job creation.

With the current digital disruption in the financial sector, more and more fintech startups are coming to the fore. Financial technology companies are springing up in tech hubs like Cape Town and Johannesburg especially, and according to Bradley Mehl from Kurtosys, a seed funder called Techstars will invest in 10 fintech startups, with with the first funding being allocated in March 2016.

South Africa is a big growth market where fintech is concerned. With this growth will not only come innovation and clever business solutions that will change the financial sector landscape, but growth means more and more startups emerging, which means more and more jobs are being created. With the changing face of technology, we will also find a redefinition of existing roles into more digital-oriented ones, with the skill set of many expanding.

Fintech startups are one up on traditional banking

We see it everywhere: new and innovative ideas and technologies are disrupting the financial sector. Many of these revolutionary technologies are shamelessly invading the spaces that are predominantly owned by banks or other financial services providers – changing the face of finance as we know it.

In this fast-paced, highly-connected, digital era that we live in, there is a constant demand for financial service products to actually add-value in people’s lives. This is where fintech is proving to be so invaluable, as it completely reimagines and remodels traditional banking products. New fintech players are able to innovate and bring completely new systems to the party as they have no legacy systems and revenue to protect. Glen believes that traditional finance options are a slow way of doing things and are busy dying out, and soon digitally advanced methods will be at the forefront of the financial sector. Next generation banking is taking over.

FinTech is changing the face of finance

We hear about fintech startups providing invaluable services to customers, like alerting them when banks and credit card issuers charge hidden fees. We hear about companies offering financial planning tools and services – often zoning in on a niche, making the service all the more bespoke. We constantly hear about companies that are reimagining financial services from the ground up in order to offer a system that creates wealth for their clients and using an innovative route to market, and are able to create employment at the same time.

The financial digital revolution has arrived, and it’s here to stay. According to KPMG, “global investment in fintech companies totalled US$19.1 billion in 2015, with US$13.8 billion invested into VC-backed fintech companies.” The boom has just begun. Agility, constant evolution, reinvention and innovation is key to keeping this sector booming and thriving – changing the face of finance.