Africa's thriving telco sector continues to go from strength to strength. From a base size of $63.17-billion in 2024, the sector is expected to reach $82.34-billion by 2029 as the continent's youthful population continues to adopt mobile tech at an astonishing rate.

While the heydays of voice revenue are behind them, telcos are increasingly pivoting to mobile financial services as the next phase of their growth.

Mobile financial services such as mobile money, insurance, healthcare and banking hold the promise of bringing a greater share of Africa's unbanked population into the formal economic fold, unlocking significant benefits for countries and their citizens.

Mobile money alone grew by 17% year-on-year across sub-Saharan Africa, reaching 763 million live accounts in 2022 and processing 45 billion transactions to the value of $832-billion, according to the GSMA.

The growth in mobile money accounts also coincides with rapid growth in subscriber numbers, with mobile subscribers expected to cross the 800 million mark by 2025.

Security concerns mounting

While larger, more established telcos already have a track record in combatting security concerns, emerging telcos will need to take extra care to ensure their financial services are secure and don't put their swelling numbers of subscribers at risk, especially as fraudsters continue to adapt their strategies.

Banks and large insurance companies have extensive systems, processes and policies in place to protect their customers against fraud and other financial crimes. 

As a growing number of telcos wish to tap into the lucrative mobile financial services sector, they must make the protection of customers a top priority.

According to one report, mobile money fraud alone exceeded $1-billion in 2021, raising concerns over the security of this new breed of mobile financial services.

Several African nations are also implementing new regulations aimed at boosting tax collection, clamping down on criminality, and boosting their economies.

This is resulting in a tricky situation for telcos, who need to balance an increasingly complex regulatory environment with powerful customer-protection measures while still maintaining high levels of profitability and growth.

Measures and technology to safeguard subscribers

In response, many telco operators now limit customer registration to their stores, which allows a greater measure of control and ensures only trusted agents are involved in the customer registration process.

However, this does have an impact on the speed at which new customers can be registered compared to the use of third-party field agents.

It’s vital that telcos find a balance between efficiently registering customers and maintaining compliance with broader regulatory requirements, while safeguarding customers from fraud and other risks.

Working with partners that understand the local regulatory landscape and customer preferences may offer the shortest route to achieving this balance. 

Itemate’s user-friendly technology solution that is designed for African telcos gives customers a choice between registering via an agent with a full audit trail, or self-registering to avoid having to provide personal details to agents.

The solution combines deep insight into local customer preferences with powerful AI capabilities that validate customer details, while integration with government systems ensures full compliance with local regulatory requirements.